Successful half year for Melrose sees revenue up 9%
WARWICKSHIRE-based manufacturing turnaround specialist Melrose as seen half year revenues rise 9% with pre-tax profit up 16%.
The firm, which has recently concluded the £1.5bn acquisition of German gas, water and electricity meter manufacturer, Elster, said it was now looking forward to enhanced growth.
For the six months to June 30, 2012, revenue was £564.6m (2011: £516.6m), while pre-tax profit came in at £81.9m (2011: £70.7m).
Headline diluted earnings per share on continuing business was up 44% at 8.2p (2011: 5.7p). However, the board’s said a more representative measure of like for like EPS performance was the proforma number which shows an increase of 15% on last year.
The board has declared an interim dividend of 2.6p per share (2011: 2.6p, as adjusted for the recent Rights Issue). It said it had elected to pay the same dividend per share on the much enlarged share capital of Melrose following the Rights Issue despite the fact that the Rights Issue was completed after June 30. The dividend will be paid to shareholders in October.
The firm said one of the most encouraging aspects of the results was that all businesses within its portfolio contributed to the rise in revenue over the period.
It said at the same time, group order intake remained higher than revenue giving rise to improved confidence for the second half of the year. Headline operating margins continued to improve and are now at 16.1%, contributing to an increase in headline operating profit of 11%.
Christopher Miller, Melrose chairman, said: “These are another set of excellent results emphasising the quality of the group and the continued success of our strategy to ‘buy, improve, sell’. We have now successfully completed our next acquisition, Elster, and look forward to growing further shareholder value from our enlarged group for the benefit of our shareholders.
“Economic conditions are difficult to predict at present but we are confident that our group companies place us in a good position to benefit from market opportunities.”
It said the recovery from the slump of 2008/09 had been slow and patchy nearly everywhere in the world and this seemed set to continue. However, it said its own businesses traded in sound end markets with good prospects such as the energy, oil & gas and mining sectors.
“Order books remain strong and our major investment programme is yet to fully reap its benefits. The addition of Elster will give us the opportunity, over several years, of enhancing existing growth prospects,” it said in outlook.
