Justin Dowley, Chairman of Melrose, said: “Melrose continues to do what it has always done well: improve businesses. Some macro conditions could be more helpful, but this has not stopped us continuing to transform the GKN businesses, delivering another trading period in line with expectations, and achieving better trends than seen in the first half of the year. We are excited about what is possible and confident in our ability to unlock significant further shareholder value.”
Divisional highlights
Aerospace
Aerospace has achieved sales growth of over 5% in the period compared to the same period last year, once again outperforming the Board’s expected longer term average growth rate. In addition, good margin improvement has been delivered compared to the same period last year.
Automotive
Automotive delivered a higher profit and margin in the Period compared to the same period last year.
In the Period sales were down 5% year-on-year, which includes the temporary effect of the General Motors strike in the US. The business consequently showed, once more, its ability to perform impressively even with this market headwind.
Powder Metallurgy
Powder Metallurgy was impacted proportionately more than Automotive by the temporary effect of the General Motors strike, which led to a sales decline of 13% in the Period compared to the same period last year - without the strike revenue would have been in line with the Board’s expectations.
In the Period, contracts were exchanged to acquire Forecast 3D, a leading player in 3D printing, which had 2018 sales of $19 million. This acquisition is expected to complete by the year end and will further expand Powder Metallurgy’s capabilities to become a leading global player in this fast growing and exciting market.
Nortek Air & Security
Nortek Air & Security has seen improving year-on-year trends in the Period compared to those seen in the first half of the year. The division achieved modest sales growth with margins similar to those achieved in the same period last year.
Other Industrial
Other Industrial is trading in line with the Board’s expectations.
Net Debt
Group net debt was in line with the Board’s expectations with significant investment and restructuring actions being funded to further improve performance and initial steps to reduce working capital in GKN being implemented as planned.
Melrose will be presenting its full year results on 5 March 2020.
