Melrose Industries Share Discussion Threads

[brexitplus] 24/4/2018 13:12

Semper. Agreed, but best rid of her. I’m sure she would say she was doing her best for GKN.

Lots of covering up going on at GKN. Now with a pragmatic board, and senior executives allowed to plough their own furrow at the helm, although I don’t expect the boss of Aero to last long, perhaps GKN will start performing as it should. After all, the media keep going on about GKN being one of our great engineering companies.

[semper vigilans] 24/4/2018 12:55

Brexit - hard to extradite possible miscreants from the US, but when the boot is on the other foot......

[brexitplus] 24/4/2018 12:49

Semper.

GKN directors appear to be pretty dodgy. Not reporting Dana, screwing their suppliers to improve their balance sheet, gifting Stevens £2 million in shares possibly in an effort to influence the result if it was tight, lying to MPs or perhaps being economical with the truth. Keeping Melrose at arms length so that they couldn’t see the financial engineering going on.

Hopefully there could be a bit of comeback, but Granny Stevens is probably baking cupcakes back in the US.

I expect minerve approves of all of the above. After all he ran an engineering company!!!

[semper vigilans] 24/4/2018 12:41

No chance of an apology from the Unions and Politicians - Jack Dromey especially?

Could there be comeback on the GKN directors?

[minerve] 24/4/2018 12:30

brexitplus states it is an "excellent acquisition" inbetween walking the dogs, farting around at Blaize(?) Castle, visiting Paris and eating out all the time. How does this oracle do it?

[brexitplus] 24/4/2018 12:25

It’s little wonder the GKN board didn’t want Melrose in to see the books. Fees for the Dana takeover. Screwing suppliers to improve the balance sheet. Then doing everything to protect their jobs.

Still, it was a good deal. Melrose offered what they considered a decent price less 10%, then added the 10%. GKN weren’t honest so a bit to make up in 2018.

But an excellent acquisition in my opinion.

Now let’s see what happens with Nortek.

[meanwhile] 24/4/2018 10:15

Forget the figures, Minerve, sentiment will win through, so they say.

[minerve] 24/4/2018 10:10

It's looking as though MRO didn't do their due diligence properly!

The three Amigos were hell-bent on managing a FTSE 100 staple.

[meanwhile] 24/4/2018 10:01

It's looking as though MRO overpaid by even more than some of us thought they'd overpaid.

[brexitplus] 24/4/2018 07:11

GKN massaging the figures re suppliers and wasting £150 million on defence. Some board.

“TRADING UPDATE FOR GKN PRIOR TO MELROSE OWNERSHIP

The following is a trading update[1] for GKN PLC ("GKN") for the period prior to Melrose ownership, being the 13 weeks from 1 January 2018 to the 31 March 2018 ("the Period"). The results are sourced directly from the GKN Group management accounts which were produced prior to Melrose acquiring the business on 19 April 2018. Melrose had no part in their preparation and has made no changes to their presentation.

As expected by Melrose, and consistent with its acquisition assumptions, the GKN performance in the Period was below the levels seen in the corresponding period in 2017.

GKN PLC Group Trading

At Actual Exchange Rates

On a management basis as defined in the 2017 GKN Annual Report, GKN Group sales in the Period were £2,599 million (2017: £2,611 million), Group operating profit was £181.5 million (2017: £215.1 million) and Group operating profit margin was 7.0% (2017: 8.2%).

At Constant Exchange Rates

On a management basis GKN sales in the Period were 5% up on last year, however operating profit was 10% below the corresponding period last year. The first quarter results show a continuation of the trend noted by Melrose previously of GKN achieving sales growth at the expense of operating margins.

Aerospace showed the most variance in performance in the Period compared to the corresponding period last year with sales 1% down and operating margin falling further to approximately 5% as the North American business continued to struggle and was loss making for the Period. The operating performance of this business is unacceptable and addressing this is a key immediate objective.

The Driveline business delivered sales growth in the Period of 7% but at the expense of operating margin, meaning profits were flat.

Powder Metallurgy achieved sales growth of 5% in the Period with operating margins of approximately 11%.


GKN Exchange Rate Sensitivity

If exchange rates stay as they were at the end of March 2018 for the balance of the year, this will likely mean there is an approximate 6% to 7% headwind to the 2018 full year results compared to 2017.

Adoption of IFRS 15

Melrose notes that while IFRS 15 (Revenue from Contracts with Customers) was introduced on 1 January this year, GKN has yet to give specific guidance on the impact of these new rules. Melrose will issue guidance on the likely impact of the introduction of IFRS 15 on GKN's revenue recognition at Melrose's half year results announcement in the first week of September.


GKN Net Debt

GKN's net debt at the end of March was £1,124 million, up from £889 million at the end of last year. The bigger than normal outflow in the first three months of the year of £235 million was partly caused by the payment of £107 million of GKN deal fees. These were higher than the deal fees previously announced by GKN and did not include the break fee payment due on the aborted Driveline sale to Dana Incorporated. In addition, in the first quarter GKN unwound approximately £150 million of creditor stretch that was imposed on suppliers to lower the GKN Group debt at the 2017 year end.

Despite these cash headwinds inherited from GKN, Melrose is confident its net debt levels at the 2018 year end will be consistent with its previous guidance.

GKN Outlook

The GKN PLC performance in the period before Melrose ownership showed trends below current market expectations for GKN for profit and cash generation. While this gives Melrose a lower starting point for GKN than current market consensus opinion, Melrose allowed for further underperformance by GKN prior to its ownership in its acquisition assumptions, and remains confident it will be able to deliver on all the statements it made during the offer period over the medium term, including creating significant shareholder value by improving the performance of the GKN businesses over time and being a responsible owner for all stakeholders.

When it announces its interim results in the first week of September 2018, Melrose looks forward to giving a comprehensive review of performance and guiding the market on its exciting plans for the long term future of the GKN businesses.

[meanwhile] 23/4/2018 23:12

The MRO price now stands within a few pence of its level just prior to the bid being announced.

[gettingrichslow] 23/4/2018 16:51

Meanwhile, can we have one of your 'calculations' now please? And then you can claim to have been invested in MRO since 2003 again!

[typo56] 23/4/2018 16:43

176m uncrossed or about 3.6% of the company. That's the FTSE100 effect.

[yertiz] 23/4/2018 16:23

Thanks for the Daily Fail stuff B+ - they just don't know when they are beaten do they? A 'victory' for the DM.....yeah, right.

[brexitplus] 23/4/2018 15:54

Getting

Well the Remainers were, and still are, quite honestly pathetic. The money they wasted on the brochure they sent round (which we put straight in recycling), the project fear, etc.

GKN on the other hand were up against consummate professionals in Melrose who hardly put a foot wrong. Their really big mistake was Dana.

But we must be realistic. Both Remain and GKN had the added disadvantage of having minerve and his sort on their side. They didn’t stand a chance.

[brexitplus] 23/4/2018 15:49

Ah yes. Does she know yet?

[gettingrichslow] 23/4/2018 15:47

Or knowing when she was born, remember!!

[gettingrichslow] 23/4/2018 15:46

B+, who would you say ran the worse campaign? GKN's Board or the Remainers? Both got 48%...

[brexitplus] 23/4/2018 15:46

Getting

That is a question that the world’s cupcake bakers will be agonising over.

Perhaps she will set up a website with the nearly £2 million of shares she was given for 3 months of not really knowing what was going on.

[gettingrichslow] 23/4/2018 15:42

B+, Indeed! And how do I now contact Anne to exchange cup cake recipes?

[brexitplus] 23/4/2018 15:27

Yertiz

This is the rubbish DM article I commented about this morning while having coffe and cake in the delightful city of Bristol, surrounded by lots of people with their lovely dogs.

Of course the government ALWAYS has a veto on the sale of sensitive companies. Note the testicles about the success of the DM campaign!!!!!! Ha ha.

And I now realise I was INCORRECT when I said there was no mention of CANNONBALLS.


“The Defence Secretary Gavin Williamson has secured a 'veto' over the sale of sensitive parts of GKN's business by its controversial new owners.

Asset-stripper Melrose told the stock exchange this week that it had completed its £8billion takeover of the 259-year-old engineering firm.

Ministers were reported to have raised 'no national security concerns' despite GKN's substantial defence interests.

But Whitehall sources said last night Mr Williamson had raised a number of concerns about the sale that will result in restrictions on Melrose's ability to sell off parts of the firm to foreign bidders.

Melrose will have to agree new concessions in the coming fortnight before the deal is given the green light by Business Secretary Greg Clark.

The Defence Secretary Gavin Williamson has secured a 'veto' over the sale of sensitive parts of GKN's business by its controversial new owners

Sources said last night Mr Williamson had demanded an 'effective veto' on national security grounds over the onward sale of parts of the firm.

The move is a victory for the Daily Mail, which has campaigned against the sale of a firm that has been supplying Britain's armed forces since it produced cannonballs for use in the Battle of Waterloo.

Whitehall sources said Mr Clark and the Cabinet Office had both been keen to wave through the bid until the Mail's campaign got under way.

'This would have just gone through on the nod if no one had kicked up a fuss,' a source said.

The outcome also underlines Mr Williamson's growing Cabinet influence.

An ally said: 'He's dug his heels in and won a significant concession that will mean vital defence parts of GKN can't be sold into foreign hands without the backing of the Defence Secretary.'

Officials are now drawing up a legal 'deed' that Melrose will be asked to sign before the takeover is approved.

The document will require the firm to seek the approval of the Defence Secretary before selling on specified parts of the company's operations abroad.

GKN is involved in a number of sensitive areas and has access to classified government information that ministers do not want to see fall into foreign hands.

These include parts for the F-35 fast jets, the Typhoon fighter and the A400M transport plane. The composite technology used in the A400M's wings is regarded as vital in keeping Britain at the cutting edge of the aerospace industry.

Asset-stripper Melrose told the stock exchange this week that it had completed its £8billion takeover of the 259-year-old engineering firm. Williamson had raised a number of concerns about the sale that will result in restrictions on Melrose's ability to sell off parts

Mr Williamson's demands go significantly further than the 'guarantees' secured by Mr Clark, which critics said were 'not worth the paper they're written on'. But they will not prevent the controversial deal from going ahead.

Ministers have concluded that there are no legal grounds for referring the deal to the Competition and Markets Authority and Mr Clark is expected to give his formal approval within the next fortnight.

Melrose had already made a 'legally binding' commitment to the Business Secretary not to sell off GKN's aerospace division for five years. But critics said the pledge was worthless as it would not prevent the firm floating the division on the stock market or selling to a 'suitable purchaser'.

The new restriction is tougher as it would require the consent of the Defence Secretary and applies indefinitely if the proposed sale is to a foreign bidder.

Under competition laws, which are based on EU regulations, the GKN deal could only be halted on national security grounds.

Mr Clark has previously suggested there was no objection in principle to the outcome of the 'battle between two British companies'.

[brexitplus] 23/4/2018 15:19

Getting. And me.

But since the GKN board has resigned, and there is an interim booard, and GKN won’t be delisted until later next month, how do I know who to contact re my congratulations on a superb takeover campaign?

[gettingrichslow] 23/4/2018 15:09

Surprised GKN have even got a website!!
ROFLMAO!!

[minerve] 23/4/2018 13:31

Hello? Hello? Anyone at home?

GKN are going to be delisted! There is no need to update their website because the shares are no longer to be listed.

Numpties visit this page for the latest information: