Melrose Industries swings to profit but warns on Brush unit

Engineering group Melrose Industries said first-half pre-tax profit rose to £47.8m from a £9.2m loss a year earlier as it warned that conditions at its Brush unit had worsened.

“Brush is experiencing its toughest market conditions since Melrose acquired it in 2008 and, accordingly, appropriate action is being taken for the long-term with all parts of the business being reviewed,” Melrose said.

“Over the summer, it has become clear from market feedback and discussions with customers that the market conditions have worsened further and there is no recovery in generators expected in the foreseeable future.”

Revenue jumped to £1.08bn from £104.7m. The dividend was increased to 1.4p a share from 0.3p.

Melrose said its specialised air conditioning unit Nortek posted a 54% rise in underlying operating profits to a record £146m.
Chairman Christopher Miller said Nortek had delivered the fastest initial improvement in performance Melrose has ever achieved.

“More investment is being made in Nortek to drive further improvements and appropriate actions are being taken in Brush for the long term. We have also been busy exploring potential acquisitions over the past few months, and remain confident in our ability to find the right opportunity," he said.

Melrose Industries shares were down 4.1% at 219.9p at 08:38 BST.