Melrose Industries PLC Trading Statement (3564G)
November 25 2020 - 2:00AM
UK Regulatory
TIDMMRO
RNS Number : 3564G
Melrose Industries PLC
25 November 2020
25 November 2020
MELROSE INDUSTRIES PLC
Trading Update
Melrose Industries PLC ("Melrose" or the "Group") publishes the
following trading update for the four months from 1 July 2020 to 31
October 2020 (the "Period"). All numbers are calculated at constant
currency.
Trading update
Melrose is currently trading at the top end of the Board's
expectations for 2020. Your Board is encouraged by this, but
clearly given the global uncertainty caution is required on any
predictions for next year.
The performance of the Group in the Period reflected the faster
than expected recovery in automotive markets, first seen over the
summer, the continued strong performance in Nortek Air Management,
and the more challenging, although currently stable, market
conditions in Aerospace.
Divisional highlights
Aerospace
As expected, Aerospace did not see a recovery in its trading
conditions with sales declining by 37% in the Period compared to
the same period last year, a very similar trend to that seen since
mid-March this year. The benefits of significant restructuring and
cost saving actions are starting to feed through and we continue to
expect the business broadly to break even for the full year.
Automotive & Powder Metallurgy
Both businesses saw an improvement in trading during the Period,
with Automotive revenue down 3% and Powder Metallurgy 7% lower
compared with the same period last year. There has, in both cases,
been an improving trend through the Period, although it is fair to
note that these stronger trends are boosted by the impact of the
General Motors strike in the latter part of the same period last
year.
Encouragingly, both businesses quickly returned to profitability
with operating margins over 6% for the Period in Automotive and
over 7% in Powder Metallurgy, reflecting the increasing benefits
arising from the significant management actions taken.
Nortek Air Management
The business has continued to trade well in the Period with
impressive revenue growth of 13% compared to the same period last
year and nearly 3 percentage points of operating margin
improvement. For the relevant Period this represents Nortek Air
Management's highest trading performance under Melrose ownership.
The business has continued to grow despite the challenging macro
conditions seen since mid-March due to the success of its new
technologies, strong market positioning, adept operational and
supply chain management, and a rebounding residential housing
construction market.
Other Industrial
Other Industrial is trading in line with the Board's
expectations.
Net debt
Group cash generation in the Period was at the higher end of the
Board's expectations with significant restructuring actions
continuing to be self-funded through an improving trading
performance and ongoing working capital inflows. Even after
significant expenditure on restructuring, it is expected that Group
net debt will be reduced this year, ignoring currency
fluctuations.
Melrose will be presenting its full year results on 4 March
2021.
Justin Dowley, Chairman of Melrose Industries PLC, said:
"Trading in the Period has been encouraging in a number of our
end markets and we are seeing the benefits of actions taken by
management in our businesses' performance. While short-term
uncertainty remains, we are confident that our businesses can
substantially improve their margins from today over the medium-term
even without the need for full end market recovery."
-ends-
Enquiries:
Montfort Communications: Nick Miles
+44 (0) 20 3514 0897
+44 (0) 7973 130 669
miles@montfort.london
Charlotte McMullen
+44 (0) 20 3514 0897
+44 (0) 7921 881 800
mcmullen@montfort.london
Melrose Investor Relations: +44 (0) 7974 974690
ir@melroseplc.net
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