Turnaround specialist Melrose Industries (MRO) accompanied its half-year figures with news that it had offloaded its Elster meter business to US industrial giant Honeywell for £3.3bn. Melrose, which specialises in buying, improving and then selling companies, bought Elster for £1.8bn in 2012. Finance director Geoff Martin says the three-year turnaround time was relatively quick and is down to how well Elster responded to restructuring, as well as its end market performance.
Revenues at both Elster Gas and Elster Electricity grew by a fifth at constant currency rates. However, Melrose's remaining business, Brush, experienced more difficult trading conditions during the period. Headline operating profit for Brush, which makes electricity-generation equipment, fell by more than half to £14.5m at constant currency. Sales suffered as a result of pressure on repair, maintenance and replacement budgets in the oil and gas and utility sectors. Brush is in the process of opening its first factory in China as part of a deal to supply General Electric with turbogenerators in the region. Mr Martin expects this to open at the start of 2016.
Broker Investec Securities expects adjusted EPS of 16.3p this year, up from 15.5p in 2014.
MELROSE INDUSTRIES (MRO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 280p | MARKET VALUE: | £2.8bn | |
| TOUCH: | 279-280p | 12-MONTH HIGH: | 309p | LOW: 236p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | NA | |
| NET ASSET VALUE: | 132p* | NET DEBT: | 57% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 (restated) | 165 | 13.2 | 1.0 | 4.8 |
| 2015 | 118 | -13.4 | -1.2 | 4.8 |
| % change | -28 | - | - | - |
Ex-div: 6 Aug Payment: 3 Sep *Includes intangible assets of £273m, or 27p a share | ||||
