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02 March 2017 07:00 Download the pdf

Full Year Results

Melrose Industries PLC today announces its audited results, which are reported under IFRS, for the year ended 31 December 2016.

Highlights

  • Melrose’s 2016 results have exceeded market expectations:
    • Brush, in its eighth year of Melrose ownership, is still experiencing adverse trading headwinds and management continues to take appropriate action
    • Nortek, acquired on 31 August 2016 for an enterprise value of £2.2 billion, is responding well to Melrose ownership and has materially outperformed, albeit in a short four month period
  • In comparison to the same four month period last year, Nortek has achieved:
    • An increase to underlying1 operating profit of 35%
    • Underlying1 operating margin of 13.4%, up 4.1 percentage points
    • Underlying1 profit conversion to cash of 134%
  • Since acquisition, Melrose has significantly reduced the debt levels in Nortek and also increased capital investment in the businesses to enhance long-term value
  • Future operating margin improvement possibilities for Nortek are better than originally thought
  • The Melrose Group achieved an underlying1 profit before tax of £96.4 million (2015: £2.4 million), despite declaring a statutory loss before tax of £69.3 million (2015: £30.7 million) after non-trading and acquisition costs
  • In spite of adverse foreign exchange translation effects on US$ debt, Melrose Group net debt has been reduced since acquisition to £541.5 million, reflecting very strong cash generation
  • A final dividend of 1.9 pence per share is proposed (2015: 0.5 pence2)
  • The Melrose Board has started the process of looking for the next acquisition

Considered by the Board to be the best measure of performance. A reconciliation of the statutory result
to underlying performance is set out in the Finance Director’s Review
2 Adjusted by a bonus factor of 18.8% related to the Rights Issue completed in August 2016

Christopher Miller, Chairman of Melrose Industries PLC, today said:

“This has been a tremendous year for Melrose and we are delighted with the performance of Nortek which is exceeding expectations. All aspects of the business are being improved and its prospects are better than originally thought. As a result we have started looking for the next acquisition that will materially enhance shareholder value.”

An analysts’ meeting will be held today at 11.00 am at Investec, 2 Gresham Street, London EC2V 7QP.

Enquiries:

Montfort Communications:

Charlotte McMullen/Sophie Arnold +44 (0) 20 3514 0897

 

Download the full audited results in PDF format