Interim Management Statement

RNS Number : 3898W

Melrose PLC

18 November 2010

 



18 November 2010

MELROSE PLC

INTERIM MANAGEMENT STATEMENT

Melrose PLC today issues the following Interim Management Statement for the period from 1 July 2010 to 17 November 2010.

OVERVIEW

The trend of revenue recovery in our businesses reported in this year's Interim Statement has continued.  Revenue visibility remains healthy on the back of increasing orders.  Together with ongoing operational and efficiency gains, this is resulting in continued progress in the operating performance of the group. 

Current trading overall remains strong and is marginally ahead of management expectations.

ENERGY

This division continues to perform strongly, particularly Brush Turbogenerators where improving sales, together with a better mix of higher margin aftermarket business and good productivity gains, give confidence of a strong outcome for the year.

The integration of the Transformers business is going to plan and the benefits of this will begin to be seen in 2011.

Marelli is progressing well with the establishment of its manufacturing plant in Malaysia.

LIFTING PRODUCTS

After a strong start to the year Crosby continues to show good sales growth.  On the back of the significant cost reduction programme, resulting from the actions taken in 2009 in the face of the downturn, operating profit and return on sales are progressing well.

As referred to in the Interim Statement, order intake at Bridon has been down on its record in 2009, principally in the offshore oil and gas sector, partly reflecting the fall-out from the Horizon oil spill in the Gulf of Mexico.  We expect profits to be satisfactory but below the record levels in 2009.  Although the onshore oil and gas sector has picked up, Bridon needs a recovery in the offshore business (which is being forecast in the industry for the second half of 2011) before it will return towards 2009 levels of performance.

DYNACAST

Dynacast continues to perform very well.  The momentum experienced in the first half has continued, with operating profit for the second half expected to be at a broadly similar level to the first half. Despite this recovery, not all of the costs that were taken out of the business in the downturn have been reversed, resulting in a business capable of achieving higher profitability than before.

Dynacast is set to end the year very strongly.

OTHER INDUSTRIAL

Although sales in the second half of the year in this division are showing decent growth over the first half, the profit growth has not quite kept pace.  This is largely down to Truth, which, having staged a very strong recovery since the first half of 2009, is currently trading at a more steady level now that pipelines have been refilled.  Despite this, it is showing significant profits growth from 2009.

Overall we are expecting a very satisfactory outcome for the year.

CASH AND TAX

Cash generation in the group continues to be most satisfactory and the mix of profit is likely to result in a reduced tax charge for the Group.

OUTLOOK

While the macroeconomic outlook remains uncertain, the news from our businesses overall is most encouraging.  The recovery in our earlier cycle businesses is extending to some of our later cycle businesses. This, together with the extensive operational and efficiency gains achieved gives us confidence that the year will end strongly and provide a good base for 2011.

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Enquiries

M: Communications                                        020 7920 2343

Nick Miles

Ann-Marie Wilkinson

 

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