Melrose warns against significant growth

WARWICKSHIRE-based turnaround specialist Melrose Industries has warned shareholders that 2013 is unlikely to be a year of significant growth for the business, although it is confident of meeting expectations.

In a statement ahead of its AGM, the Alcester group said: “Whilst worldwide economic conditions mean your board does not consider that 2013 is likely to be a year of significant revenue growth, our market positions and the opportunities to improve the performance of our businesses within the group means your board remains confident of meeting expectations and improving performance this year.”

It said that as disposals from the FKI acquisition started to take place the board remained committed to its strategy of returning value to shareholders.

In an overview, the group revenue in the period from January 1, 2013 was 1% lower than last year, at constant currency, although operating margin was higher.
 
Further improvements to the performance of German smart metering business Elster, acquired last year in a £1.5bn deal, have been achieved and as a consequence, it said the results achieved during the four months were significantly ahead of its performance in the same pre-acquisition period last year.
 
The conditional sale of Truth, the group’s US hardware business, in a £129m deal was announced last week and Melrose said a sale process was currently under way for Marelli Motori, its Italian generator business.

“There has been encouraging progress in the Marelli sale process but it is still at an early stage,” it said.
 
“Overall the performance of the group during the period has been encouraging and your board remains confident about the outcome for the year.”