Interim Management Statement

RNS Number : 4313I

Melrose PLC

19 November 2008

 



                                    19 November 2008

MELROSE PLC

INTERIM MANAGEMENT STATEMENT

Melrose PLC today issues the following Interim Management Statement for the period from 1 July 2008 to 18 November 2008.

Highlights

 

§         Current trading remains in line with our expectations and the integration of FKI is

      proceeding ahead of plan 

§         The opportunities to improve the operations and working capital of FKI are better

      than expected at acquisition

Overview

Trading across our Lifting Products and Energy Technology divisions has been good and they have strong order books.

Dynacast continues to perform well. Although current market conditions are likely to have some effect on future sales, a combination of its strong market position, good operational management and integration of recent acquisitions leave it well positioned to weather a downturn.

Truth is performing in line with expectations consistent with the depressed conditions prevalent for some time in the US housing market. As planned at acquisition Hickory's operations will be discontinued by the year end, resulting in positive cash flow for the group.

In our Interim Statement, it was announced that in view of the conditions in the US automotive industry a fundamental review of MVC had been instigated. Our review is now almost complete and by the year end we will have taken the appropriate action.

Current conditions in the financial markets have made the sale of Logistex a longer process than hoped for. During our ownership better disciplines have generated £30 million in cash from a permanent reduction in working capital. Although we remain confident of a sale, if we are unable to agree a satisfactory sale by the year end, we will implement our plans for operational improvements to this business. 

Melrose's financial position is strong with a financing facility that lasts until 2013 and under which we have ample headroom. Better management of FKI's working capital since acquisition has resulted in profit conversion to cash (after capital expenditure) of over 100 per cent. Approximately two thirds of borrowings are in US dollars, one quarter in Euros and the balance in Pounds Sterling in order to match the group's net investment.

Outlook

The outlook for the global economy has clearly deteriorated over the last few weeks. However, the strength and the spread of our businesses and products, the significant opportunities presented by the acquisition of FKI, our ability to manage costs effectively and the benefits from foreign currency translation give the Board confidence that 2009 will be a year of progress.

The Group will report its preliminary results for the year ending 31 December 2008 on 11 March 2009.

Enquiries

Melrose PLC                                                              0207 647 4500

David A Roper, Group Chief Executive

Geoffrey Martin, Group Finance Director

M: Communications                                                  0207 153 1530 

Nick Miles

James HilI

 

END

 

 

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