Melrose Industries - Trading Statement
AGM Trading Statement
The Group traded in line with expectations from
As previously stated in our announcement dated
Robust cash management remains the top commercial priority of the Group this year with comprehensive cash preservation actions being successfully implemented in each business, including a focus on reducing working capital to match reduced sales, cutting or delaying both capital expenditure and longer-term restructuring projects and also reducing costs. Capital expenditure and trade working capital actions alone are forecast to deliver approximately
Melrose started the year with approximately
Factories in our Aerospace division have largely remained open. Defence related factories make up approximately 30% of last year's sales and are expected to be relatively unaffected by the COVID-19 virus.
In relation to civil aerospace, five factories within the Aerospace division are currently closed (representing 5% of the division's sales in 2019) and the rest are operating at reduced capacity.
Actions have been taken to reduce the cost base of this division and detailed plans are being drawn up to position the business appropriately for future demand. Further information on this will be disclosed in the 2020 interim announcement. Whilst clearly there will be a detrimental effect on the aerospace industry arising from current events, the Board believes there is substantial opportunity to continue to improve this market leading business and position it well for the future.
The net result of the above trading conditions in the Period was a sales decline of 8% versus the same period last year.
Automotive and Powder Metallurgy
The Automotive and Powder Metallurgy businesses have seen similar trading patterns to each other with their factories in
Again, management has taken significant actions to reduce the cost base of these businesses, and plans are being drawn up to position for the future. In both cases these businesses enjoy large market shares and strong customer relationships and the Board believes significant opportunity exists to improve their performance.
The net result of the above trading conditions in the Period was that these two divisions combined had a sales decline of 31% versus the same period last year.
Nortek Air Management and Other Industrial
The economic impact of the virus on the
The net result of the above trading conditions in the Period was that these two divisions combined had a sales decline of 12% versus the same period last year.
Melrose debt facilities are well balanced and there are no short-term maturities. Prudently, the Group took action at the end of last year to extend the maturity of the c.
As stated above, the headroom on the committed bank facilities at the end of April remains largely unchanged since the start of the year, at c.
In the circumstances the Board has asked
In light of current government guidance prohibiting gatherings of more than two people, your Board has also upgraded the attendance restrictions for our AGM and so regretfully are unable to allow attendees other than the two employee shareholders necessary for a quorum.
"Our divisional management teams and head office employees have responded brilliantly to these unparalleled circumstances, which are likely to remain challenging for a while. During the next few months we will put in place plans to position our businesses to achieve their future potential in different market conditions. Melrose has a track record of managing its businesses successfully in all market environments and crucially our recent cash generation performance shows we have been able to maintain the strength of the balance sheet to position the Group's businesses in the best way for the future."
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This information is provided by RNS, the news service of the
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