Melrose Industries (MRO) H1 2025 earnings summary

Executive summary

• Delivered strong H1 2025 financial performance with revenue up 6% and adjusted operating profit up 29%, despite industry supply chain and tariff disruptions.

• Multi-year transformation and restructuring programme nearing completion, supporting operational and margin improvements.

• Structurally growing aerospace and defence markets, with a unique portfolio supporting OE and aftermarket growth.

• Positioned for accelerated cash flow generation, underpinned by growing earnings and one-time cost savings.

• Interim dividend increased 20% to 2.4p per share; £71m of £250m share buyback completed.

Financial highlights

• Group revenue up 6% year-over-year to £1.72bn, led by Engines division; adjusted operating profit up 29% to £310m.

• Free cash outflow improved by £91m to £54m, driven by higher earnings and lower restructuring costs.

• Adjusted diluted EPS rose 30% to 15.1p; statutory diluted EPS at 22.2p.

• Group margin increased 380bps to 18%; interim dividend of 2.4p per share, up 20%.

• Net debt at £1,404m, leverage at 2.0x EBITDA, after funding growth and buybacks.

Outlook and guidance

• Full-year 2025 guidance at constant currency reaffirmed; revenue expected at £3,425–3,575m, with 7% like-for-like growth.

• Adjusted operating profit guidance: £620–650m; aerospace operating profit: £650–680m; group margin above 19%.

• Free cash flow guidance maintained at £100m+ for 2025, with key drivers being EBITDA growth, lower restructuring costs, and working capital inflows.

• Five-year targets: high single-digit revenue growth to £5bn by 2029, operating profit £1.2bn+, and free cash flow £600m.

• Leverage expected to remain below 2x, with potential for further buybacks.