Tough manufacturing conditions impact Melrose
TOUGH trading conditions within the manufacturing sector are impacting on the performance of Warwickshire turnaround specialist Melrose Industries.
The Alcester-based group said trading for its Elster Group subsidiary had been strong in the 10 months to October 2015 with sales up 14% versus last year at constant currency.
The sale of Elster to Honeywell is on course to complete in the first quarter of 2016 and Melrose has secured permission to create a new company to oversee the repayment of between £2bn and £2.5bn to shareholders.
However, it said that as previously announced its Brush subsidiary had been experiencing challenging end market conditions with the first half sales being down 26% at constant currency compared to last year.
As expected, the performance has improved in the four months since the half year so that revenue for the ten months to October is down 17%. Trading is in line with expectations for the full year albeit potentially towards the lower end of the range.
Recent results from industrial companies globally have been somewhat downbeat and it may be that this trend continues for some time. In these uncertain circumstances, Melrose said it was optimistic that a suitable acquisition would be identified bringing with it another opportunity to create substantial value for shareholders.
