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Highlights

  • Melrose Industries has proposed a final dividend of GBX 4.0 per share for FY24, marking a 14% increase
  • The company reported FY24 revenue of GBP 3,468 million, a 3.5% increase from FY23
  • Adjusted operating profit for FY24 rose 38.5% YoY to GBP 540 million.
  • For 2025, Melrose targets revenue of GBP 3.55–3.70 billion, with an adjusted operating profit of GBP 700 million

 Melrose Industries PLC (LSE:MRO), a UK-based aerospace company, has proposed a final dividend of GBX 4.0 per share for the financial year 2024 (FY24), reflecting a 14% YoY increase. This brings the total dividend for 2024 to 6.0p, marking a 20% rise from FY23. Melrose specialises in producing advanced components and systems for top OEMs in both the civil and defense sectors.

In FY24, Melrose reported a revenue of GBP 3,468 million, representing a 3.5% increase compared to FY23. This growth was largely driven by a 26% increase in Engines revenue, which was further supported by parts repair, the defense aftermarket, and the RRSP portfolio. Despite industry-wide supply constraints and customer destocking, structures revenue grew by 3%. However, foreign exchange fluctuations impacted revenue, reducing it by GBP 66 million when compared to the anticipated USD 1.25 exchange rate in 2024.

Adjusted operating profit for FY24 reached GBP 540 million, reflecting a substantial 38.5% YoY increase. This improvement was driven by the growth in revenue, business enhancements, and a favorable shift in the aftermarket mix. The Engines division outperformed expectations with a remarkable 28.9% margin, surpassing its 2025 target ahead of schedule. Meanwhile, the structures division maintained a solid margin of 7.2%, remaining on track despite challenges like lower OEM build rates.

Company Outlook

For 2025, Melrose projects revenue between GBP 3.55 billion and GBP 3.70 billion, with an adjusted operating profit of GBP 700 million and free cash flow exceeding GBP 100 million, with a higher profit performance expected in the second half of the year. Looking ahead to 2029, the company’s targets include GBP 5 billion in revenue, GBP 1.2 billion in profit, GBP 600 million in free cash flow, and a leverage ratio below 2x.

Top 10 Shareholders

The top 10 shareholders of Melrose collectively own approximately 55.87% of the company's total shares. Capital Research Global Investors holds the largest stake, with around 20.24% of the shareholding, followed by BlackRock Investment Management (UK) Ltd., which owns about 7.28%.

Stock Information

The stock has dropped approximately 17.47% over the past month, but it has gained around 11.64% over the last six months. Its 52-week low stands at GBX 413.57, while the 52-week high is GBX 707.20. Currently, the stock is trading below the average of its 52-week high and low with a closing price of GBX 521.6 as of 17 March 2025.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 17 March 2025. The reference data in this report has been partly sourced from EODHD/Others.

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Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.