Melrose Industries PLC (LON:MRO) today announced its audited results for the year ended 31 December 2018. This includes 8 months of contribution from GKN since acquisition. An additional measure to guide ongoing performance, the 2018 unaudited, annualised adjusted1 numbers, is also shown below.
Highlights
§ The results for 2018 are ahead of the Board’s previous expectations
§ This outperformance has been achieved before including a £63 million positive impact from the required IFRS accounting treatment for loss-making contracts. Resolution of these loss-making positions offers significant potential for further performance improvement
§ Adjusted1 diluted earnings per share were up 36% on last year, with a proposed final dividend of 3.05 pence per share which is 9% up on last year, giving a full year dividend of 4.6 pence per share, up 10%
§ Total free cash flow from trading was £196 million. This was after all costs including restructuring, special pension contributions and tax
§ The net debt to EBITDA1 leverage ratio has reduced to 2.3x, ahead of the previous guidance of 2.5x
§ North America Aerostructures is approaching operational break-even, on a run rate basis, and relationships with key aerospace customers have been much improved
§ In Automotive, present indications are consistent with a slowdown, but this is not currently expected to cause a major impact on 2019 profitability. Improvement actions are underway to ensure the successful long-term development of the business
§ Nortek Group adjusted1 operating margins have increased from 8.7% at acquisition to 14.7% in 2018 with the potential for further improvement
§ The GKN UK defined benefit pension accounting deficit has reduced from £691 million to £588 million since December 2017, and an independent Chairman of the trustees has been appointed
§ An investor event for Aerospace and Automotive will be held on 3 April 2019 in London
Justin Dowley, Chairman of Melrose Industries PLC, today said:
“This has been a transformational year for Melrose and we are delighted to announce, on an annualised adjusted basis, an operating profit of over one billion pounds. The former GKN businesses are proving their potential to offer the outstanding opportunities we expected and much has already been achieved in the short period of ownership. Despite the current economically uncertain environment, we have every confidence that we will be able to continue to unlock the substantial shareholder value from the former GKN businesses and further improve Nortek.”
