Melrose Industries PLC (LON:MRO) reported a full year loss but said it will continue to pursue a £7bn hostile takeover bid for GKN PLC (LON:GKN).
The industrial turnaround specialist posted a statutory pre-tax loss of £27.6mln in 2017, compared to a loss of £69.3mln a year ago. The company said since it was the first full year of owning US air management business Nortek, it incurred significant restructuring costs.
Stripping out the one-off charges, underlying pre-tax profit more than doubled to £257.7mln.
Nortek boosts revenues
A strong performance at Nortek helped revenue rise to £2.1bn from £889.3mln a year earlier.
"We are delighted with the performance Nortek is achieving freed from the previous culture of 'head office knows best',” said Melrose chairman Christopher Miller.
“Substantial long-term value is being created with significant investment in new technology, new products and operations.”
However, Brush - its investee company which produces generators - is experiencing "extremely difficult" conditions following the decline of the core gas turbine market.
In response, Brush is implementing a restructuring plan for its Turbogenerator business.
Melrose pursues hostile bid for GKN
The company took its bid to buy GKN hostile earlier this month after the engineer rejected its initial offer.
READ: GKN plans to return £2.5bn to shareholders in three years as it continues takeover fight
Melrose said it believes that GKN is in need of “fundamental change to reverse its long-term underperformance”.
“We are convinced that GKN would gain significantly from becoming part of an enlarged £10bn UK industrial powerhouse, benefiting from the proven Melrose operating model,” Miller said.
Melrose lifted its final dividend to 2.8p each, bringing its total payment for the year to 4.2p, compared to 2.2p in 2016.