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07 March 2019 07:00 Download the pdf

Full Year Results

Melrose Industries PLC today announces its audited results for the year ended 31 December 2018. This includes 8 months of contribution from GKN since acquisition. An additional measure to guide ongoing performance, the 2018 unaudited, annualised adjusted1 numbers, is also shown below.


  • The results for 2018 are ahead of the Board’s previous expectations
  • This outperformance has been achieved before including a £63 million positive impact from the required IFRS accounting treatment for loss-making contracts. Resolution of these loss-making positions offers significant potential for further performance improvement
  • Adjusted1 diluted earnings per share were up 36% on last year, with a proposed final dividend of 3.05 pence per share which is 9% up on last year, giving a full year dividend of 4.6 pence per share, up 10%
  • Total free cash flow from trading was £196 million. This was after all costs including restructuring, special pension contributions and tax
  • The net debt to EBITDA1 leverage ratio has reduced to 2.3x, ahead of the previous guidance of 2.5x
  • North America Aerostructures is approaching operational break-even, on a run rate basis, and relationships with key aerospace customers have been much improved
  • In Automotive, present indications are consistent with a slowdown, but this is not currently expected to cause a major impact on 2019 profitability. Improvement actions are underway to ensure the successful long-term development of the business
  • Nortek Group adjusted1 operating margins have increased from 8.7% at acquisition to 14.7% in 2018 with the potential for further improvement
  • The GKN UK defined benefit pension accounting deficit has reduced from £691 million to £588 million since December 2017, and an independent Chairman of the trustees has been appointed
  • An investor event for Aerospace and Automotive will be held on 3 April 2019 in London

Justin Dowley, Chairman of Melrose Industries PLC, today said: 

“This has been a transformational year for Melrose and we are delighted to announce, on an annualised adjusted basis, an operating profit of over one billion pounds. The former GKN businesses are proving their potential to offer the outstanding opportunities we expected and much has already been achieved in the short period of ownership. Despite the current economically uncertain environment, we have every confidence that we will be able to continue to unlock the substantial shareholder value from the former GKN businesses and further improve Nortek.”

The audited results












Operating (loss)/profit



(Loss)/profit before tax




Diluted earnings per share



  • The statutory and adjusted1 results include GKN for the eight months since acquisition on 19 April 2018
  • The 2018 adjusted1 operating profit was £847 million; excluding the positive impact from the required IFRS accounting for loss-making contracts in GKN it would have been £784 million
  • The statutory loss before tax of £550 million arose primarily due to significant acquisition related items, most of which arise from GKN

The unaudited annualised adjusted1 results – including 12 months of GKN


Annualised adjusted1 results including 12 months of GKN





Operating profit


Profit before tax



Diluted earnings per share


  • The annualised adjusted1 results include a full 12 months of GKN assuming it was acquired on 1 January 2018, and give a meaningful measure of annualised performance to guide ongoing results
  • The annualised adjusted1 operating profit was £1,095 million; excluding the positive impact from the required IFRS accounting for loss-making contracts in GKN it would have been £1,002 million
  • The annualised adjusted1 diluted earnings per share were8 pence, up 41% on Melrose adjusted1 diluted earnings per share last year

1. Described in the glossary to the 2018 Preliminary Announcement, released on 7 March 2019


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