Melrose Industries PLC Trading Update & New Guidance (8466Y)
10 Mai 2023 - 8:00AM
UK Regulatory
TIDMMRO
RNS Number : 8466Y
Melrose Industries PLC
10 May 2023
10 May 2023
MELROSE INDUSTRIES PLC
Trading Update & New Guidance
Melrose Industries PLC ("Melrose") publishes the following
trading update for the first four months of the year to 30 April
2023 (the "Period"). All numbers are calculated at constant
currency and exclude the businesses recently demerged under Dowlais
Group PLC.
Following completion of the demerger, Melrose is an aerospace
business and will report as two divisions: Engines and Structures.
For the first time Melrose introduces written trading guidance for
the current year.
Trading update
Melrose is trading materially ahead of expectations with
significant growth in revenue, profit and margin being
achieved.
For the first four months of this year revenue was up 19% on the
same period in 2022, with Engines showing the fastest momentum, up
28%, and Structures up 14%. The adjusted(1) operating margin has
increased substantially year-over-year to c.10% prior to PLC costs.
Restructuring projects are also proceeding to plan and should be
materially complete in the next 12 months.
New guidance for Melrose for full year(2) 2023:
-- Revenue between GBP3.35 billion and GBP3.45 billion(3)
-- Adjusted(1) operating profit between GBP340 million and GBP360 million (prior to PLC costs)
-- Adjusted(1) EBITDA between GBP495 million and GBP515 million (prior to PLC costs)
-- PLC head office costs reducing from c.GBP45 million to c.GBP30 million in total
And in addition:
-- Substantial further growth is expected in future years, with
the 14%+ Aerospace adjusted(1) operating margin target expected to
be reached on a run rate basis during 2024
-- New 2025 Melrose guidance, including for Engines and
Structures, will be announced at the Capital Markets Event on 17
May
Strategy
Since flotation in 2003, Melrose has created significant
shareholder value through its 'Buy, Improve, Sell' strategy.
For the next 12 months the focus is to create further
substantial value for shareholders by maximising the embedded
quality and potential of Aerospace.
Beyond that, Melrose will continue as a pureplay aerospace
company. Consequently, the Board will not seek to do another
acquisition of an unrelated industrial business or, in the near
term, a material aerospace business. As the Aerospace restructuring
completes over the next 12 months, this strategy will give Melrose
the ability to consistently buy back a proportion of its shares
each year thereafter. Further details on this will be given at the
Aerospace Capital Markets Event.
The Melrose Board remains, as ever, focused on realising
shareholder value in the best way possible.
New guidance versus company compiled consensus
With the introduction of formal written guidance in this
statement, it is noted that, at the close of business yesterday,
the company-compiled consensus for 2023 for analysts following
Melrose was revenue of GBP3.4 billion, adjusted(1) operating profit
for Aerospace of GBP324 million, and adjusted(1) operating profit
post PLC costs of GBP279 million. The new company guidance
announced today is therefore an increase of between 5% and 11% for
Aerospace adjusted(1) operating profit and between 11% and 18% for
total Melrose adjusted(1) operating profit post PLC costs.
Simon Peckham, Chief Executive of Melrose Industries PLC,
said:
"Aerospace has huge embedded value and an EBITDA of GBP1 billion
is achievable within the next few years, much of this coming from
the premium Engines business. With the new simplified strategy for
Melrose announced today, we look forward to explaining the full
potential of Aerospace at the upcoming Capital Markets Event next
week including the route to realising this value."
1. Described in the glossary to the Melrose Industries PLC
Annual Report and considered by the Board to be a key measure of
performance
2. Calculated using a foreign exchange rate of GBP1 = US$1.25
3. Including c.GBP150 million of revenue from planned site closures to be exited in 2024
-ends-
Enquiries:
Montfort Communications: +44 (0) 20 3514 0897
Nick Miles +44 (0) 7739 701634 / Charlotte McMullen +44 (0) 7921
881800
miles@montfort.london / mcmullen@montfort.london
Investor Relations: Chris Dyett +44 (0) 7974 974690
ir@melroseplc.net
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END
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