(Alliance News) - Melrose Industries PLC shares jumped on Thursday, after it upgraded it full-year guidance on the back of some strong interim results.
It also increased its dividend and said it will be starting its share buyback early, whilst Co-Founder & Chief Executive Simon Peckham will step down in March next year.
Shares in the Birmingham, England-based aerospace manufacturer were up 8.1% to 550.00 pence each early Thursday, following the results. It was the best FTSE 100 performer of the morning.
Melrose said that it traded ahead of expectations in the first half of 2023. Revenue rose to GBP1.63 billion from GBP1.36 billion a year earlier. Pretax loss narrowed to GBP62 million from GBP314 million.
Melrose said it will pay an interim dividend of 1.5 pence per share, up from 0.825p a year earlier.
It also said that it will be beginning its share buyback programme early, at the beginning of October. This will start with a GBP500 million buyback over 12 months.
Looking ahead, Melrose upgraded its annual guidance, it guides for Aerospace adjusted operating profit between GBP375 million and GBP385 million, which is over 8% higher than prior guidance. It is also expecting revenue between GBP3.35 billion and GBP3.45 billion.
Melrose had reported revenue of GBP7.54 billion in 2022, though that included Dowlais Group PLC. It had reported Aerospace operating profit of GBP186 million.
In April, Melrose completed the demerger of the GKN Automotive, GKN Powder Metallurgy and GKN Hydrogen businesses from the company into Dowlais. Dowlais is now a FTSE 250 constituent.
Chief Executive Officer Simon Peckham said: "We are delighted with these results and the outlook for Melrose. Whilst there is still work to do, the business is very capable of producing over GBP1 billion of Ebitda and providing excellent returns for shareholders. This is further demonstrated by the confidence to start early the share buyback programme."
It also noted that it is now a long-term aerospace group. In line with this new strategic direction, Peckham and Finance Director Geoffrey Martin will step down on March 7 next year. Peckham co-founded Melrose back in 2003, whilst Martin had joined as finance director in 2005.
Peckham will be replaced by Peter Dilnot, currently Melrose chief operating officer. Matthew Gregory, who is chief financial officer of GKN Aerospace, has been named as the new finance director.
By Sophie Rose, Alliance News reporter
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Melrose (MRO)
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