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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Melrose Industries PLC    MRO   GB00BZ1G4322

MELROSE INDUSTRIES PLC

(MRO)
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Delayed Quote. Delayed London Stock Exchange - 01/15 11:35:09 am
181.95 GBX   -1.91%
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GKN owner Melrose to cut jobs after second-quarter losses, shares plunge

07/22/2020 | 03:18am EST

Melrose Industries, the turnaround specialist that owns British engineer GKN, plans to cut jobs as it grapples with the coronavirus-led downturn that drove it to a second quarter loss.

Shares in the FTSE 100 company fell as much as 20% on Wednesday after it also said it would not pay an interim dividend and analysts cut their profit forecasts.

Melrose, which employs about 53,000 people globally, did not say how many jobs would go, nor in which businesses.

However, it said a "substantial" reduction of costs in its aerospace division - a big revenue contributor with 50 manufacturing sites in 15 countries - was underway.

Melrose specialises in buying and improving underperforming businesses and has operations in the aerospace, autos and industrial sectors, which have been battered by the pandemic.

Two years ago, it clinched an 8 billion pound ($10 billion) takeover of GKN, which supplies parts to carmakers such as Volkswagen, components to aircraft including the Eurofighter Typhoon and made Spitfires during the Second World War.

The company has been cutting costs and expects to save about 100 million pounds ($127 million) in 2021, it said.

It did not give a figure for its second-quarter loss, but said it was "likely" to make a small adjusted operating profit in the first half.

"It is clear that our, and consensus, expectations on the impact of COVID-19 were too optimistic," JPMorgan analysts said, cutting their 2020 forecast for adjusted earnings before interest, tax and amortisation by 38% to 223 million pounds.

Melrose said it had generated about 200 million pounds of free cash flow, reducing its debt pile by 90 million. It had liquidity headroom of over 1.1 billion pounds as of June 30, the London-based company added.

JPMorgan said the cash position should remove any lingering balance sheet concerns.

($1 = 0.7906 pounds)

By Yadarisa Shabong


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
JPMORGAN CHASE & CO. -1.79% 138.64 Delayed Quote.11.10%
MELROSE INDUSTRIES PLC -1.91% 181.95 Delayed Quote.2.19%
MSCI UNITED KINGDOM (STRD, UHD) -1.67% 1069.544 Real-time Quote.3.74%
VOLKSWAGEN AG -0.07% 151.88 Delayed Quote.-0.35%
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Financials
Sales 2020 9 028 M 12 259 M 12 259 M
Net income 2020 -618 M -839 M -839 M
Net Debt 2020 3 430 M 4 657 M 4 657 M
P/E ratio 2020 -15,8x
Yield 2020 -
Capitalization 8 840 M 12 016 M 12 003 M
EV / Sales 2020 1,36x
EV / Sales 2021 1,27x
Nbr of Employees 55 000
Free-Float 98,5%
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Technical analysis trends MELROSE INDUSTRIES PLC
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TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 15
Average target price 185,31 GBX
Last Close Price 181,95 GBX
Spread / Highest target 39,9%
Spread / Average Target 1,85%
Spread / Lowest Target -47,8%
EPS Revisions
Managers and Directors
NameTitle
Simon Antony Peckham Chief Executive Officer & Director
Laurence Justin Dowley Non-Executive Chairman
Peter Dilnot Chief Operating Officer & Executive Director
Geoffrey Peter Martin Group Finance Director & Executive Director
James Christopher Miller Executive Vice Chairman
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