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(Alliance News) - Melrose Industries PLC on Thursday said its loss narrowed by almost two thirds in the first half of 2019 as revenue doubled, led by its acquisition of engineering firm GKN just over a year ago.
Shares in Melrose were up 5.5% at 195.70 pence in London in early morning trade.
The industrial turnaround specialist reported a GBP128 million pretax loss for the six months ended June 30, well below its GBP372 million loss the year before.
Revenue for the period was twice what it had been, totalling GBP5.70 billion versus GBP2.85 billion.
Within this, Aerospace revenue shot up to GBP1.89 billion from GBP713 million and Automotive revenue soared to GBP2.17 billion from GBP896 million. Powder Metallurgy revenue rose to GBP574 million from GBP254 million.
The big increase in revenue was the result of Melrose's hostile takeover of GKN in 2018 - GKN's three main divisions having been Aerospace, Automotive, and Powder Metallurgy.
Melrose's GBP8.4 billion bid was accepted by shareholders back in March 2018.
Net operating expenses increased to GBP1.16 billion from GBP842 million and finance costs rose to GBP126 million from GBP51 million, however.
The firm's adjusted results, which exclude "items which are significant in size or volatility or by nature are non-trading or non-recurring, or are items released to the income statement that were previously a fair value item booked on an acquisition" showed revenue of GBP6.00 billion, up from GBP2.97 billion. Adjusted pretax profit was GBP429 million, up from GBP244 million.
"The Melrose board considers the adjusted results to be an important measure used to monitor how the businesses are performing as they achieve consistency and comparability between reporting periods when all businesses are held for the complete reporting period," the company said.
In terms of outlook, Melrose is confident in meeting its annual expectations, although it will be challenged by tariffs and downturn in the automotive sector. The firm intending to improve business performance though investment, as well as better cash management and cost control - as well as increase accountability.
Chair Justin Dowley said: "These results show the initial fruits of the 'improve' stage of Melrose's ownership of GKN and, with the overall GKN margin increasing positively, we are excited about what is possible. The performance is in line with expectations and leverage is better than expected. At the same time, this has been a year of record investment in Aerospace technology and substantial eDrive development. The Melrose board is confident that our businesses will deliver significant upside for shareholders."
Melrose lifted its dividend 10% to 1.70p per share from 1.55p per share the year before.