Melrose Industries (LON:MRO) Posts Earnings Results

Key Points

• Strong first-half results: Constant-currency revenue increased 10% to nearly £1.9 billion, while operating profit rose 16% to £347 million and margins expanded to 18.5%. The Engines division led growth, with revenue up 19% and profit up 21%.
• Garden Grove disruption weighs on outlook: The incident reduced first-half revenue by £16 million and profit by £9 million, with further monthly impacts and £25 million–£30 million in exceptional costs expected. Legal, regulatory, compensation and insurance liabilities remain uncertain.
• Buyback paused, guidance maintained: Melrose suspended its £175 million share repurchase pending greater clarity on Garden Grove liabilities, but reiterated 2026 revenue, operating-profit and cash-flow guidance excluding the incident.

Melrose Industries (LON:MRO - Get Free Report) released its earnings results on Friday. The company reported GBX 17.80 earnings per share for the quarter, Digital Look Earnings reports. Melrose Industries had a return on equity of 13.03% and a net margin of 10.31%.

Here are the key takeaways from Melrose Industries' conference call:

• Strong first-half performance: Constant-currency revenue rose 10% to nearly £1.9 billion, operating profit increased 16% to £347 million, margins expanded to 18.5%, and EPS grew by more than 20%.
• Engines led growth with revenue up 19% and profit up 21%, supported by 23% original-equipment growth, mid-teens aftermarket growth, stronger repairs activity, and continued expansion of the GTF, GEnx and V2500 programs.
• The Garden Grove incident halted acrylic production and reduced first-half revenue by £16 million and profit by £9 million. Management expects approximately £6 million of monthly revenue, profit and cash impact in the second half, plus £25 million–£30 million of additional exceptional costs, while legal, regulatory, compensation and insurance outcomes remain uncertain.
• Melrose has paused its £175 million share buyback until there is greater clarity on Garden Grove-related liabilities, although management emphasized that the program has been paused rather than cancelled.
• Excluding Garden Grove, full-year 2026 guidance was reiterated for revenue of £3.75 billion–£3.95 billion, operating profit of £700 million–£750 million and underlying cash flow of £150 million–£200 million. Management remains confident in its longer-term path to £600 million of free cash flow in 2029, helped by production ramps, aftermarket growth, RSP cash generation and the GTF becoming cash-positive in 2028.

Melrose Industries Price Performance

LON MRO traded down GBX 20.90 during mid-day trading on Friday, hitting GBX 454.30. The stock had a trading volume of 9,868,512 shares, compared to its average volume of 36,167,695. The firm's 50 day moving average is GBX 472.57 and its 200 day moving average is GBX 529.33. The company has a debt-to-equity ratio of 67.32, a current ratio of 0.98 and a quick ratio of 0.45. The stock has a market capitalization of £5.66 billion, a price-to-earnings ratio of 15.67, a PEG ratio of 0.48 and a beta of 0.84. Melrose Industries has a twelve month low of GBX 409.90 and a twelve month high of GBX 685.

Insiders Place Their Bets

In other Melrose Industries news, insider Ross McCluskey bought 3,667 shares of the company's stock in a transaction dated Thursday, June 25th. The stock was acquired at an average price of GBX 475 per share, with a total value of £17,418.25. Also, insider Chris Grigg bought 20,000 shares of Melrose Industries stock in a transaction dated Tuesday, June 16th. The stock was acquired at an average price of GBX 472 per share, with a total value of £94,400. Insiders have acquired a total of 63,101 shares of company stock valued at $29,444,975 in the last 90 days. 2.59% of the stock is owned by insiders.

About Melrose Industries

Melrose Industries PLC, together with its subsidiaries, provides aerospace components and systems to civil and defence markets in the United Kingdom, rest of Europe, North America, and internationally. The company operates through two segments, Engines and Structures. The Engines segment offers structural engineered components; parts repair; and commercial and aftermarket contracts to engines original equipment manufacturers. The Structures segment provides civil and defence air frames, including lightweight composite and metallic structures; and electrical distribution systems and components to airframe original equipment manufacturers.

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