Melrose Industries jumped almost 5% as the engineer significantly upped its guidance for aerospace earnings in 2025.
FTSE 100 member Melrose said it now expects operating profits in 2025 to double to £700mln, underlying profits [EBITDA] to rise by 72% to £870mln and margins to increase to 22% from 15%.
Melrose added it is the engines arm, rather than structures, that will increasingly drive the business forward with 85% of profits coming from aftermarkets by 2025.
Cash flow is also tipped to rise sharply from 2024 onwards, which will give it the capacity to buy back between 5-10 10% of its market cap a year in addition to any ordinary dividend.
Simon Peckham, chief executive, said: "We are making clear today that after 5 years hard work, Aerospace is now positioned to fulfil the potential it had at acquisition, with a highly enviable aftermarket presence and predictable strong cashflows.