Trading Update

Melrose PLC
25 January 2006


                                 TRADING UPDATE

Melrose PLC is issuing a trading update in advance of its preliminary results
announcement for the year ended 31 December 2005, expected to be released on 15
March 2006.

Trading at Dynacast, the global manufacturer of precision engineered components,
is in line with our expectations, with slower conditions in Europe and the US
offset by buoyant demand in the Far East. The restructuring of the manufacturing
operations started with the closure of the UK facility, which has now been
completed and further actions are underway. New product initiatives are
progressing well and we will report further news at the time of our preliminary
results announcement.

Aerospace OEM continues to benefit from very favourable market conditions in the
aerospace industry. A plan has been agreed to improve the operational efficiency
of Hartwell, the major subsidiary, which should enable the group to derive
further benefit from this upturn from 2007 onwards.

McKechnie PSM, our UK based fasteners business, announced the closure of its
Continental European operation in December, including the Czech Republic plant
and this should be completed by the end of April 2006. Some of the Czech
production is being transferred to our operation in China.

Overall, we are pleased with the outcome for the year ended 31 December 2005 and
we are confident that 2006 will be a year of good progress.

Enquiries

Tom Hampson, M Communications - 020 7153 1522

Charlotte Kirkham, M Communications - 020 7153 1531


Notes
     
1)   The Dynacast Group and the McKechnie Group were acquired on 26 May 2005.

2)   Melrose's shares were admitted to listing on the Official List of the 
     London Stock Exchange on 9 December 2005.




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