GKN owner Melrose flags softer 2026 sales on supply-chain bottlenecks

Fri, 27th Feb 2026 09:21

Feb 27 (Reuters) - ‌Melrose Industries on Friday forecast softer-than-expected 2026 revenue due to sector-wide supply chain constraints and tariff uncertainties, ⁠overshadowing strong 2025 results and sending its shares down ⁠as much as 13.5%.

Shares in the owner of GKN Aerospace were the biggest fallers on Britain's blue-chip FTSE-100 index.

CEO Peter Dilnot told Reuters that demand across civil and defence aerospace remained exceptionally strong but warned that bottlenecks at ‌major manufacturers such as Airbus, Pratt & Whitney and GE were the key risk to meeting that demand.

"The supply chain remains fragile and is yet to recover to pre-COVID levels, with the operational environment expected to remain complex and dynamic in 2026," the company said.

SHIFTING TARIFFS

Melrose's results come as uncertainty over U.S. trade policy intensifies, with Washington ‌starting to collect a temporary 10% global import tariff while the administration works to raise the rate to 15%.

The shifting ‌tariff landscape has left companies weighing the impact of short-term duties and the prospect of refunds after the U.S. Supreme Court struck down an earlier programme.

Dilnot said Melrose had largely mitigated the impact of changing U.S. tariffs, noting that defence work and operations covered under the U.S.-Mexico-Canada ‌trade deal were exempt, while remaining exposure had been managed through contracts and agreements with suppliers and customers.

The London-listed company expects 2026 revenue of 3.75 billion pounds to 3.95 billion ⁠pounds ($5.05 billion-$5.32 billion), ⁠below analysts' estimate of 4.01 billion pounds, according to ‌data compiled by LSEG.

The company also expects annual adjusted operating profit between 700 million and 750 million pounds.

For 2025, it posted an 8% rise in revenue to 3.59 billion pounds and ‌a 23% increase in adjusted operating profit to 647 million pounds, lifted by solid aftermarket demand and higher defence spending driven by geopolitical tensions.