Melrose revenues jump on robust aftermarket
UK aerospace company Melrose Industries Plc on Friday held annual guidance after "significantly higher" adjusted operating profit in the four months to October 31 on the back of a 14% rise in revenues, driven by engine aftermarket services.
Aftermarket grew by 22% and included a return to robust growth for Melrose's parts repair business. Engines' performance includes continued momentum from the increase in original equipment (OE) production rates and the recovery from tariff-related uncertainty and backlogs in the first half.
In the civil aerospace unit, record backlogs were underpinning the OE production ramp while air traffic growth and low retirement rates continued to support the aftermarket.
"Geopolitical uncertainty is driving a step change in defence spending, which is providing a number of new growth opportunities for the group. The UK/US and EU/US tariff agreements have been welcomed by market participants, providing greater certainty for the civil aerospace industry," the company said in a trading update.
The company expects adjusted operating profit in a range of £620m - £650m and revenues of £3.42bn - £3.57bn.
Reporting by Frank Prenesti for Sharecast.com
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