Melrose shares plunged nearly seven per cent this morning as the aerospace group flagged it grappling with “industry-wide supply chain challenges” in its half-year results.
The London-listed firm, which owns GKN Aerospace, revised down its revenue guidance to £3.8bn amid the issues.
Investors ditched the stock in early trading despite a largely upbeat set of results, which saw Melrose launch a £250m, 18-month share buyback programme.
The aerospace firm’s results came in ahead of expectations, with adjusted operating profit up 62 per cent year-on-year to £260m. Revenue also rose from £1.63bn to £1.74bn in the six months ended 30 June.
Chief executive Peter Dilnot said: “We have made strong progress in the first half, driven by engines aftermarket performance and business improvement actions, despite industry-wide supply chain challenges.
“We remain confident of delivering on our 2024 and 2025 guidance. Our positive outlook and disciplined capital allocation enables us to invest more in attractive organic growth opportunities, as well as continue shareholder returns through our growing dividend and the further share buyback programme announced today. We have positive momentum, a clear strategy and excellent growth opportunities ahead.”
Wider guidance for the group remained largely unchagned. Adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) is expected to fall in the range of £710m and £730m.
Adjusted operating profit forecasts have been held at between £550m and £570m.
Investors can look forward to an interim dividend of 2p per share, up by a third on last year and to be paid on 16 September.