Melrose Industries PLC (LSE:MRO, OTC:MLSPF) shares fell 8% to 624.8p on Thursday morning as profit taking hit the aerospace parts manufacturer as it reported profits for 2024 at the top end of expectations and predicted a "step change" in cash generation in the years ahead.
Revenue came in at £3.5 billion last year, up 11%, with operating profits up 42% to £540 million.
Management confirmed guidance for 2025 of £700 million adjusted operating profit, amid the completion of restructuring and free cash flow to increasing to at least £100 million.
New five-year targets were also launched, for high single digit revenue growth to around £5 billion, adjusted operating profit of £1.2 billion-plus and free cash flow to mushroom to £600 million.
"With structural demand from record order backlogs and increasing aftermarket requirements set to continue, we are well placed to deliver further profitable growth and a step change in cash generation in the years ahead," the company said.
During the year, the company completed its £500 million share buyback programme, and began a further £250 million share buyback programme that is due to complete in March 2026.
Leverage is to remain under 2X providing optionality "including potential future share buybacks".
The shares had been strong into results, up 50% over the past six months.