Full Year Results
Melrose Industries PLC today announces its audited results, which are reported under IFRS, for the year ended 31 December 2017.
- Nortek underlying1 results are better on all measures; revenue growth is 2%2 with increased momentum in the second half of the year when sales were up 4%2, the operating margin is 15.2%, operating profit is up 52%2 on last year and up 67%2 on the last full year prior to acquisition
- The underlying1 results are a key measure of performance and are shown alongside the statutory results. As 2017 was the first full year of Nortek ownership by Melrose, significant restructuring costs were incurred and, following the structural decline of the core gas turbine market for Brush, its balance sheet value has been reduced to £300 million. These two items are included in the adjustments made between statutory and underlying1 results
- Consultations with employees have commenced to implement a restructuring plan which, when complete, will position Brush well for the future
- Cash generation is strong, with a record performance from Nortek. Net debt was £572 million representing leverage of 1.9x3 underlying1 EBITDA4, significantly lower than at the time of the Nortek acquisition only sixteen months previously
- In line with the Melrose strategy, advisors have been appointed to confirm the appropriate future process and timetable for the disposal of Ergotron, Inc
- The proposed final dividend of 2.8 pence (2016: 1.9 pence) per share together with the interim dividend of 1.4 pence (2016: 0.3 pence5) results in a 91% increase in the full year dividend of 4.2 pence per share (2016: 2.2 pence5)
- Considered by the Board to be a key measure of performance. Underlying measures are defined in the glossary to the Financial Statements.
- Proforma underlying1 growth as described in the glossary to the Financial Statements.
- Using net debt at average exchange rates.
- Underlying1 operating profit before depreciation and amortisation.
- 2016 interim dividend adjusted to include the effects of the 2016 Rights Issue.
Christopher Miller, Chairman of Melrose Industries PLC, today said:
“We are delighted with the performance Nortek is achieving freed from the previous culture of ‘head office knows best’. Substantial long-term value is being created with significant investment in new technology, new products and operations. Brush is implementing a restructuring plan to reflect its changed market place which will position it well for the future. We are convinced that GKN would gain significantly from becoming part of an enlarged £10 billion UK industrial powerhouse, benefitting from the proven Melrose operating model.”
An analysts’ meeting will be held today at 11.00 am at Investec, 2 Gresham Street, London EC2V 7QP.
Nick Miles / Charlotte McMullen +44 (0) 7973 130 669 / +44 (0) 7921 881 800