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11 May 2018 07:00 Download the pdf

AGM Trading update

Melrose Industries PLC (“Melrose”) publishes the following trading update for the four months from 1 January 2018 to 29 April 2018 (the “Period”), ahead of its Annual General Meeting taking place later today.

  • The ownership percentage of GKN PLC has increased to 94% by the close of business on 9 May 2018 and is expected to reach 100% in June 2018.
  • An announcement was made on 24 April 2018 which detailed the trading performance by GKN in the first thirteen weeks of 2018, a period prior to Melrose ownership.
  • Further guidance on future plans for GKN will be given at the Melrose half year results announcement in the first week of September.
  • Given the recent acquisition of GKN, your Board intends to review the existing Melrose remuneration arrangements and expects to consult with shareholders in the coming months.
  • Within Nortek, Air Management has continued to invest in significant new product development programmes which are expected to result in market leading product launches over the next year as well as improving order pipelines. In addition, significant investment is being made in the manufacturing footprint and operations to improve efficiencies and performance.
  • Security and Smart Technology acquired IntelliVision for $35 million, a US company that develops and implements video and artificial intelligence analytics technology which will transform Security’s smart capabilities. This acquisition gives Security and Smart Technology access to a range of recognition and detection analytics which should put us at the forefront of developments in the security marketplace. As announced previously, a lower margin contract manufacturing arrangement winds down this year with sales of approximately $150 million in 2017. The company has retained the higher margin sensors associated with this arrangement of roughly $40 million and is replacing the balance with other products but the rollout of these has been slower than expected.
  • Ergotron is at the initial stages of a sale process, with US corporate tax likely being due on the excess of the sale price above $350 million.
  • As guided previously, foreign currency movements are creating a headwind for 2018. If exchange rates stay as they were at the end of April for the balance of the year this will cause a headwind of approximately 11% to the Nortek results.
  • Trading levels at Brush are unchanged and its substantial restructuring plans are proceeding on time and on budget.

Christopher Miller, Chairman of Melrose said:

“We are very excited by what is in store for Melrose over the next few years. We look forward to working with the GKN employees to transform the prospects of the businesses through significant investment. Nortek and Brush also remain an important focus for Melrose with continuing plans to increase their value and prospects.”