Shares in Melrose Industries soared after the FTSE 100 firm raised its annual profit guidance, buoyed by a robust performance in its aerospace division.
The engineering group, known for its buy-and-improve strategy, now expects adjusted operating profit for 2024 to reach between £590m and £610m—up from its previous forecast of £570m to £590m.
Strong Aerospace Demand Drives Growth
Melrose credited the improved outlook to higher-than-anticipated demand in its aerospace unit, which manufactures components for major aircraft manufacturers like Airbus and Boeing. The division has benefited from the post-pandemic rebound in global air travel.
"The aerospace market continues to recover strongly, and our teams are delivering excellent operational performance," said a company spokesperson.
Investor Confidence Rises
The upgraded forecast sent shares climbing by as much as 4.5% in early trading, making Melrose one of the top gainers on the London Stock Exchange. Analysts welcomed the news, with several brokers revising their price targets upward.
"Melrose’s ability to exceed expectations demonstrates the strength of its restructuring strategy," noted one market analyst.
Future Prospects
Looking ahead, Melrose remains optimistic about further growth, particularly in aerospace and automotive sectors. The company also hinted at potential strategic acquisitions to expand its portfolio.
Investors will be watching closely for updates when Melrose releases its half-year results later this month.
