Melrose PLC today issues the following Interim Management Statement for the period from 1 July 2012 to 15 November 2012.
OVERVIEW
Trading for the Group is in line with expectations for 2012. However, especially in the last few weeks, slower trends for certain businesses are noticeable compared to those seen in the first half of the year. The acquisition of the Elster Group was completed successfully in the period and the process of improving its performance is well underway. The Melrose Board remains confident about the prospects for delivering significant shareholder value over the medium term from this acquisition.
Given that the acquisition of the Elster Group happened part way through the period on 23 August this year, comparisons of trading results within the period and to last year are not consistent. The most meaningful comparisons can be made for Melrose companies excluding Elster.
For these Melrose companies, revenue, at constant currency has continued to grow in the period compared to the same time last year, by 6% compared to 10% in the first half, giving a year to date revenue growth of 8%.
The overall weekly rate of order intake in the period is 8% lower than the first half of the year but it is too early to tell how this will affect 2013, and it will vary by business.
OUTLOOK
The Melrose businesses are not immune to any worsening of macro-economic conditions internationally, but they are positioned in the strong end markets of Energy and Oil & Gas which should fare better than most over the medium term. In addition, the Group's five month order book gives protection to the short term outlook.
Trading is in line with expectations for 2012, although revenue trends have slowed, and recently the sales outlook for 2013 has become more uncertain. Opportunities to improve the Group exist including those arising from the acquisition of Elster and this gives the Board confidence that Melrose will continue to prosper.
We have already made significant changes to Elster, and identified larger than expected cost savings. It is early days to draw meaningful conclusions about the current trends in trading, but initial indications point to current revenue trends having slowed and the boost from European Electricity Smart Meters being delayed.
