Industrial turnaround specialist Melrose (MRO) follows a 'buy, improve, sell' strategy. The idea is to purchase underperforming manufacturing businesses, invest in them to boost productivity and then dispose of them for a profit, typically three to five years later. It acquired engineering company GKN for £8.1bn in 2018, inheriting £629m-worth of lossmaking contracts. Operational efficiencies and price increases saw these losses drop 11 per cent last year and this progress is reflected in Melrose’s full-year numbers. The group swung to a statutory pre-tax profit in 2019, while adjusted operating profit increased by over a third to £1.1bn, exceeding analysts’ expectations.
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