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• Profit Increase: 42% increase to GBP540 million in 2024.

• Revenue Growth: 11% like-for-like increase, led by the engines division.

• Operating Margin: Increased by 400 basis points to 15.6%.

• Earnings Per Share (EPS): Grew 45% to 26.4p.

• Engines Division Revenue Growth: 26% increase, driven by aftermarket performance.

• Aftermarket Revenue Growth: 32% increase, with Swedish military business up 74%.

• Operating Profit (Engines Division): Grew 40% to GBP422 million, with margins at 28.9%.

• Structures Division Revenue Growth: 3% increase, with defense revenue up 7%.

• Operating Profit (Structures Division): Grew 32% to GBP144 million, with margins increasing to 7.2%.

• Free Cash Flow (2024): GBP23 million before interest and tax.

• Net Debt: GBP1.321 billion, with leverage at 1.9 times.

• 2025 Revenue Guidance: GBP3.550 billion to GBP3.700 billion, with 7% like-for-like growth.

• 2025 Operating Profit Guidance: GBP680 million to GBP720 million, with margins exceeding 19%.

• Free Cash Flow Guidance (2025): In excess of GBP100 million post interest and tax.

• Warning! GuruFocus has detected 9 Warning Signs with MLSPF.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Melrose Industries PLC (MLSPF) delivered a strong performance in 2024 with a 42% increase in profit to GBP540 million, despite lower-than-expected revenue growth.

• The company achieved an 80% reduction in lost time accidents and further improvements in quality, highlighting a strong focus on safety and operational excellence.

• Melrose Industries PLC (MLSPF) completed the sale of three noncore businesses, including two to Boeing, as part of its ongoing portfolio rationalization.

• The Engines division showed robust revenue growth of 26%, driven by strong aftermarket performance and good OE growth.

• The company is targeting high single-digit CAGR in revenue, leading to GBP5 billion of revenue by 2029, with significant margin expansion and cash generation.

Negative Points

• The Structures division's growth was dampened by ongoing supply chain challenges and specific customer destocking and production rate changes.

• Overall revenue fell slightly short of expectations due to a weaker dollar impact of around GBP70 million.

• The company is tempering its revenue guidance for 2025 due to continued supply chain challenges affecting the aerospace industry.

• Melrose Industries PLC (MLSPF) faces higher tariffs on imports into the USA, particularly from Mexico, which could impact costs.

• The GTF program is currently consuming cash, with the program expected to turn cash positive only in 2028.