Melrose is ‘performing well’ amid inflationary pressures

Birmingham manufacturer Melrose Industries has seen its revenue 14% up this quarter, with operating profit substantially higher.

The group says that inflation in all of its businesses is being successfully recovered, using ‘all necessary external and internal measures’ and is trading in line with expectations for the full year.

Its aerospace division has improved in the first half of the year, with sales up 11%, and trading has been stronger again since, with the average revenue per month in the period being 6% higher than that seen in the first half.

Revenue in the Automotive and Powder Metallurgy (DemergerCo) businesses combined is up 19% in the period versus the same period last year, with margins significantly stronger.

As Melrose looks to the longer-term future of electrification, it says lifetime business bookings year to date are trending 30% higher than revenue and just under 40% of these wins are for pure electric vehicles (BEV).

The demerger of its GKN Automotive and GKN Powder Metallurgy businesses from the group, into an independent and separately listed company is on track to be completed in the first half of 2023.

GKN’s automotive and powder metallurgy businesses will be separated from Melrose’s aerospace arm and form DemergerCo by way of a demerger of shares.

Simon Peckham, Chief Executive of Melrose Industries PLC, said: “Trading is going to plan and the demerger timetable for Automotive and Powder Metallurgy is on schedule. Our businesses are performing well, achieving a materially stronger performance in the second half of this year for profit and cash generation, and coping well with the current inflationary environment.”