Trading update for the four months from 1 July 2024 to 31 October 2024
All numbers are calculated at constant currency
Peter Dilnot, Chief Executive Officer of Melrose said:
"It's encouraging that we remain on track to deliver on our full year expectations, despite the industry-wide supply chain challenges. This reflects the strength of our businesses and the balanced position we have with our aftermarket offsetting original equipment headwinds. As we move into 2025, we enter a period of significant and sustained growth in our cash flow for many years ahead. I am confident that Melrose's established capabilities, technology leadership, and unique position on the world's leading aircraft and engines will create substantial value in the future."
Revenue was up 7% on the same period in 2023, with Engines, up 17%, showing strong progress driven by aftermarket revenues, and Structures growing at 1%.
Importantly, the Group expects its cash flow position to improve significantly next year and to deliver substantial free cash flow in 2025 (post interest and tax). The Group's cash flow is poised to grow materially beyond this as a result of the completion of its restructuring programmes, the resolution of the GTF powder metal issue, all RRSPs generating cash and the continuing growth of the Group's profits.
The company continues to apply excess cash to the repurchase of shares to reduce its equity financing and to benefit remaining shareholders, each of whom will enjoy an increase in their ownership share as a result.
These repurchases are strategic and undertaken when management believes that the stock is trading below its intrinsic value, so this form of capital allocations suggests that management share my opinion that this stock is currently attractively priced (as argued in the analysis to which this comment is appended).
For me this continues to be a buy-and-hold type of investment (not for short-term speculators, but a great opportunity for long-term intelligent investors). This is not investment advice and should not be relied upon as the basis for your investment decisions, please do your own due diligence.
TRADING UPDATE, 18th November 2024
Trading update for the four months from 1 July 2024 to 31 October 2024
All numbers are calculated at constant currency
Peter Dilnot, Chief Executive Officer of Melrose said:
"It's encouraging that we remain on track to deliver on our full year expectations, despite the industry-wide supply chain challenges. This reflects the strength of our businesses and the balanced position we have with our aftermarket offsetting original equipment headwinds. As we move into 2025, we enter a period of significant and sustained growth in our cash flow for many years ahead. I am confident that Melrose's established capabilities, technology leadership, and unique position on the world's leading aircraft and engines will create substantial value in the future."
Revenue was up 7% on the same period in 2023, with Engines, up 17%, showing strong progress driven by aftermarket revenues, and Structures growing at 1%.
Importantly, the Group expects its cash flow position to improve significantly next year and to deliver substantial free cash flow in 2025 (post interest and tax). The Group's cash flow is poised to grow materially beyond this as a result of the completion of its restructuring programmes, the resolution of the GTF powder metal issue, all RRSPs generating cash and the continuing growth of the Group's profits.
The company continues to apply excess cash to the repurchase of shares to reduce its equity financing and to benefit remaining shareholders, each of whom will enjoy an increase in their ownership share as a result.
These repurchases are strategic and undertaken when management believes that the stock is trading below its intrinsic value, so this form of capital allocations suggests that management share my opinion that this stock is currently attractively priced (as argued in the analysis to which this comment is appended).
For me this continues to be a buy-and-hold type of investment (not for short-term speculators, but a great opportunity for long-term intelligent investors). This is not investment advice and should not be relied upon as the basis for your investment decisions, please do your own due diligence.