GKN Owner Melrose Profits From Airlift Clawback, Cost Reductions
Sept. 2 (Reuters) – Melrose Industries (MRON.L) posted a first-half profit on Thursday, as the takeover of its aerospace division following the resumption of air travel and strict cost cuts helped the company to British engineering to compensate for a sudden shortage of chips.
The company, which owns aircraft and car parts supplier GKN, warned in May that choking off chip supplies for automakers would hurt its growth. The company restructured GKN and cut jobs during the pandemic to save money and increase margins.
Melrose said adjusted operating income for the six-month period ended June 30 was 223 million pounds ($ 307.32 million), compared to a loss of 11 million pounds last year. Revenue increased by almost 6%, with sales improving across all divisions.
“We continue to see a recovery in all of our businesses with trading above expectations. It is encouraging to see that our aerospace business is now weighted by the expected narrow-body recovery,” said Chairman Justin Dowley, referring to a smaller aircraft type.
Melrose, which specializes in acquiring and turning around underperforming companies before selling them, said as the semiconductor crisis continues, the shift to electric vehicles has given its automotive unit a boost.
The London-listed company has said it will pay an interim dividend of 0.75 pence after ignoring payments last year.
($ 1 = 0.7256 pounds)
Report by Pushkala Aripaka in Bangalore; Editing by Sherry Jacob-Phillips and Subhranshu Sahu
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