Melrose Industries PLC (LSE:MRO, OTC:MLSPF) shares jumped as much as 7%, topping the FTSE 100 leader board, after the aerospace and defence specialist reassured markets by maintaining full-year guidance despite currency headwinds and tariff uncertainty.
Revenue rose 6% on a like-for-like basis to £1.72 billion, while adjusted operating profits surged 29% to £310 million, supported by margin improvements in both its Engines and Structures divisions.
Engines grew strongly, up 11%, driven by profitable risk-and-revenue sharing partnerships and new contracts, including an extended deal with Pratt & Whitney.
The Structures division posted a more modest 3% growth, benefiting from strong defence contracts with BAE Systems and Lockheed Martin, despite weaker performance in civil aviation.
Melrose also made significant progress in its multi-year restructuring programme, helping improve free cash flow by £91 million compared to last year. Investors welcomed an interim dividend increase of 20% to 2.4p per share.
Although sterling’s strength against the dollar has forced the company to trim revenue and profit targets slightly in absolute terms, underlying guidance remains unchanged.
"This looks like a strong update across the board," said Stifel, repeating its 'buy' call and 700p price target.
"[The] only possible disappointment is lack of a full-year upgrade, but this is not required to leave Melrose looking notably cheap vs peers, in our view."
The shares rose 27p to 539.2p.