Melrose Industries (MRO) H1 2025 earnings summary

Executive summary

• Delivered strong H1 2025 financial performance with 6% revenue growth, 29% increase in adjusted operating profit to £310m, and substantial free cash flow improvement, despite supply chain and tariff disruptions.

• Multi-year transformation and restructuring programme nearing completion, supporting operational and margin improvements, with footprint rationalisation on track for 2025.

• Structurally growing aerospace and defence markets, with a unique portfolio supporting OE and aftermarket growth and record order backlogs.

• Clear path to value creation and accelerating cash flow generation, with significant contract wins and portfolio repricing ahead of schedule.

• Statutory operating profit was £441m (vs. £62m loss prior year), with profit before tax at £379m and diluted EPS at 22.2p.

Financial highlights

• Group revenue up 6% year-over-year to £1,720m, led by 11% growth in Engines and 3% in Structures.

• Adjusted operating profit increased 29% to £310m, with group margin up 380bps to 18%.

• Adjusted diluted EPS rose 30% to 15.1p; statutory diluted EPS at 22.2p.

• Free cash outflow improved by £91m to £54m, driven by higher earnings and lower restructuring costs.

• Interim dividend increased 20% to 2.4p per share; £71m of share buyback completed in H1.

Outlook and guidance

• Full-year 2025 guidance reaffirmed at constant currency; revenue expected at £3,425–3,575m.

• Adjusted operating profit guidance set at £620–650m; Aerospace profit guidance at £650–680m, Engines at £490–510m, Structures at £160–170m.

• Free cash flow guidance maintained at £100m+ for 2025, with confidence in achieving £600m by 2029.

• Margin targets: Engines >32%, Structures ~9%, Aerospace margin above 19%.

• Leverage expected to remain below 2x, with potential for further buybacks.