Melrose interims hold up as Charter bid falters
WARWICKSHIRE-based engineering turnaround specialist Melrose has announced a 9% increase in first half revenue, with a higher order intake than 12 months ago.
Melrose, which has received a setback in its bid to acquire Charter International, said sales for the six months to June 30, 2011 were £555.9m (2010: £509.9m), with orders up 18% during the period when compared with last year.
The Alcester firm said pre-tax profit rose to £63.1m (2010: £40.3m), with operating margins rising to 15.4% (2010: 13.8%).
Earnings per share (were 28% higher at 14p (2010: 10.9p), while the interim dividend increased by 15% to 4.6p (2010: 4.0p).
The period saw it complete the sale of Powys based die casting firm Dynacast in a deal worth £377m, with a fourfold increase in equity value. The proceeds of the sale have been returned to shareholders.
The group is currently bidding for welding and gas handling group Charter International. However, Charter confirmed yesterday that a rival bid for the company had been submitted.
Christopher Miller, Melrose chairman, said: “The first half of 2011 has been another strong period for Melrose and, with the successful sale of Dynacast and subsequent return of capital, has seen a further validation of our ‘buy, improve, sell’ business model.
“Revenue has increased, and we were pleased to surpass our 15% operating margin target by improving headline margins by more than 50% in three years. We have now raised our targets, and believe that there is more to come from the existing portfolio.
“Following the Charter announcement yesterday we have asked Charter to cooperate in a diligence process and to lengthen the ‘put up or shut up’ timetable to assist us in presenting an offer for their shareholders’ consideration.”
He said despite market volatility, July trading had been line with expectations and the group’s investment plans and its end markets suggested it was well placed for the future.
