Melrose Industries Puts on 5% Following Profitable Final Results


LONDON -- Shares in Melrose leaped 12.80 pence, or 4.9%, to reach 272.80 pence in early trade this morning, following the release of its audited final results for the year ending 31 December 2012.

The British-based investment company saw revenues rise to 1.55 billion pounds in 2012, compared to 1.08 billion pounds the previous year. Pre-tax profits increased to 214.3 million pounds against 2011's 154.7 million pounds, while headline diluted earnings per share were also up, coming in at 16.1 pence having previously stood at 15.8 pence.

The industrial turnaround specialist pinpointed its 1.8 billion pounds August acquisition of Elster as a particular highlight of the year. The company is a big German manufacturer of utility meters, and Melrose stated that its improvement plan is one year ahead of schedule: operating margin at Elster increased by 1.9 percentage points to 14.1%, while operating profit was up 11% with revenue 2% lower, at constant currency.

Chairman of Melrose Industries, Christopher Miller, commented:

Since inception less than 10 years ago Melrose has created over [2 billion pounds] of shareholder value. We are very pleased with Elster and are already one year ahead of our improvement plan, increasing margins faster than expected. Existing Melrose businesses have performed well and Elster is proving to be another great opportunity to create more value for Melrose shareholders.

Shareholders saw the final dividend raised by 4% to 5 pence per share, leading to a full-year dividend of 7.6 pence. This puts Melrose on a yield of 2.9%, with the company having seen reasonable growth over the last few years.

Indeed, the shares are now on a five-year high -- if investors had bought into the company at 2009's low of 32.9 pence, they would now be sitting quite happily on eightfold returns!

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