Proactive Investors - Melrose Industries (LON:MRON) has raised its profit expectations for the year ahead after reporting better-than-expected results for 2023.
Operating profit in Melrose’s aerospace wing more than doubled to £420 million in 2023, the manufacturer said on Thursday, beating previous guidance.
This came as overall margins grew by 600 basis points to 12.5%, aided by a near doubling in operating profit to £310 million in its aircraft engine business, where margins sat at 26%.
A recovery in global flight times following the pandemic coupled with Melrose “entering the lucrative aftermarket ‘sweet spot’” during the year, the company said.
Melrose’s structure business also saw a stronger year, with margins climbing from 1.3% to 5.1% and adjusted operating profit sitting at £110 million.
"Melrose Aerospace has delivered record results in 2023, ahead of upgraded guidance, driven by strong operating margin progression in both divisions,” chief executive Peter Dilnot said.
The results come after Melrose doubled down focus on the aerospace industry and demerged its automotive, powder metallurgy and hydrogen divisions in April last year.
Melrose hiked guidance for the coming year on the back of the results, with adjusted operating profit set to come in 6% higher than originally thought at between £550 million and £570 million.
Margins in Melrose’s engine business will likely reach 28% meanwhile, hitting the target a year early and keeping the company on track to reach a 30% margin by 2030.