Melrose Industries (MRO) H2 2024 earnings summary

Executive summary

• Delivered strong 2024 results with profit at the top end of expectations, despite industry supply chain challenges.

• Completed major restructuring, sold three non-core businesses, and expanded capacity in key platforms.

• Announced new five-year targets: high single-digit revenue CAGR, margin expansion to 24%+, and >20% CAGR in EPS.

• Positive momentum into 2025, with continued profit growth and substantial positive free cash flow expected.

Financial highlights

• 2024 operating profit up 42% to £540m; EPS up 45% to 26.4p; group revenue up 11% like-for-like to £3.47bn.

• Margins rose 400bps to 15.6%; Aerospace operating profit up 38% to £566m, margin at 16.3%.

• Aftermarket revenue in Engines up 32%; operating profit in Engines up 40% to £422m, margin at 28.9%.

• Structures operating profit up 32% to £144m, margin up to 7.2%.

• Free cash flow before interest and tax at £23m; after interest and tax negative £74m; net debt at £1,321m, leverage at 1.9x.

Outlook and guidance

• 2025 revenue guidance: £3.55bn–£3.70bn (7% like-for-like growth midpoint); operating profit £680m–£720m; margin >19%.

• Engines division to maintain double-digit growth, margin >32%; Structures margin expected at 9%.

• Free cash flow after interest and tax to exceed £100m in 2025, with cash generation weighted to H2.

• Five-year targets: £5bn revenue by 2029, >24% margin, £1.2bn+ operating profit, £600m+ free cash flow.

• Leverage to remain below 2x; capex ratio to depreciation 1–1.2x; adjusted tax rate 21–22%.