Melrose Industries has reaffirmed its full-year guidance following a robust four-month trading period, with group revenue climbing 14% at constant currency.
The aerospace and defence manufacturer reported particularly strong momentum in its Engines division, with revenue surging 28% between July and October.
Original equipment sales jumped 35%, driven by the company’s Rolls-Royce Strategic Partners portfolio across narrowbody and widebody platforms. Aftermarket revenue grew 22%, benefiting from a recovery in parts repair operations.
Melrose shares were 2% higher at the time of writing, and it’s likley they’d be higher if there wasn’t the degree of selling elsewhere.
Chief Executive Peter Dilnot described the performance as “another strong performance during this transformational year”. He emphasised the company’s focus on ramping up production to meet customer demand, supported by what he called “differentiated technologies and established positions on all the world’s leading aircraft”.
Melrose left its full-year targets unchanged, projecting revenue between £3.425 billion and £3.575 billion. Adjusted operating profit is expected in the range of £620 million to £650 million, after PLC costs of £30 million.
The company anticipates free cash flow generation exceeding £100 million after interest and tax.
A lot to like for investors. Full-year results are scheduled for release on 27 February 2026.
“With less than two months to go, Melrose remains on the right flight path to hit recently downgraded full-year targets, which call for underlying operating profits to rise around 18% to £635mn at the midpoint,” explained Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“In a short trading update, the aerospace business revealed that its Engines division continued to power group performance, with revenue rising at double-digit rates over the four months to 31 October. The outlook here is positive, with record backlogs underpinning Melrose’s production ramp-up. Continued air traffic growth and low retirement rates of planes are also supporting demand for its aftermarket services.
“The Structures division, which deals with building the body and wings of planes, saw revenue grow by 5%, with momentum picking up since the half-year mark. Strong Defence demand and business improvements have helped support the group’s pricing power. But performance on the Civil side continues to be held back by customer supply chain issues. There’s not a great deal Melrose can do about this – it’s a challenge for the whole industry and the problem’s likely to persist for some time.”