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Melrose delays investor payout over Ukraine market turmoil

Melrose Industries has become the latest company whose plans have derailed due to the market storm following Russia’s invasion of Ukraine, saying it will defer payment to shareholders despite reporting results that were ahead of expectations.

The FTSE 100 purchasing group said it had decided that in light of the events taking place in Ukraine, “with the effects affecting global markets at this stage uncertain and non-quantifiable”, it would maintain a timely repayment review.

Investors widely expected the company to declare a payment. Melrose, which is nearing the end of a reorganization of the GKN space and space group, Returned £ 730 million to shareholders From the proceeds from the sale of its U.S. air conditioning unit in September last year. At the time, it announced it would announce an additional return, assuming its business continued to recover as expected.

Shares of Melrose fell more than 7% at 131p in afternoon trading in London.

Simon Perkham, CEO of Melrose, said the group was “watching” in light of the political and economic turmoil.

“Not only do we not see a current impact, we do not think it is very likely that there will be a direct impact on us,” he said.

Melrose had no operations in Ukraine or Russia, he added. Like other Western space companies, Melrose draws between 15 and 20% of its titanium from Russia. Peckham, however, insisted the company remain protected. “We do not see this as a particular problem at the moment,” he said.

Peckham said the group would consider disbanding GKN, which it bought as part of a controversial event Takeover in 2018When the time was right, and raised the prospect of a separate IPO of its automotive and space business.

“No matter what the appropriate mechanism, we have not changed our business model. We buy, improve and sell,” he said.

“We’re going to get a recovery. We just have an argument about when that will be.”

Under the £ 8bn takeover terms, Melrose has given a government commitment not to sell the aerospace business for five years. That commitment will expire next year.

Peckham said the turnaround in GKN’s automotive business, which provides vehicle propulsion lines, will be completed for the most part this year. The recovery of GKN’s aerospace business, which was affected by the epidemic in the aviation industry, is lagging behind.

Melrose reported a pre-tax loss for the year to end-December 2021 of £ 618 million, down from a loss of £ 679 million in the previous year. Cash production was ahead of expectations and net debt was reduced from £ 2.83 billion to £ 950 million.

Separately, the Maggit aircraft parts group said it was back to earning in 2021, but warned of the ongoing effects on its operations from the epidemic and disruptions in the global supply chain. The company, which is in the process of predominant By American competitor Parker Hanipin, it is a major component supplier to Boeing and Airbus.

“As we look ahead, and although the recovery in civil and aerospace recovery is expected to remain uneven in the short term, the outlook and long-term foundations of our civil and aerospace business remain positive,” Maggie CEO Tony Wood said in a statement.

Maggie said pre-tax profit for the year to end-December was £ 31.3m, compared to a loss of £ 334m the previous year. Revenue fell 12% to £ 1.49 billion.

Melrose delays investor payout over Ukraine market turmoil Source link Melrose delays investor payout over Ukraine market turmoil

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