Melrose Industries Share Discussion Threads

[brexitplus] 30/7/2018 09:45

More from Senior. Sales up marginally but operating profit margin increased as the Melrose model.

“SENIOR BUMPS UP INTERIM PAYOUT, SAYS END-MARKET DEMAND "GENERALLY HEALTHY"

(Sharecast News) - Senior bumped up its interim dividend payout, even as it said it was "watching with care" for any impact from the geopolitical trade discussions, thanks to an improved performance at both of its main divisions.

The aerospace and automobile engineering group said in a statement that trading was ahead of expectations for the six months ending on 30 June, raising its interim dividend by 6.8% to 2.19p.

Profits before tax meanwhile were 20% higher at £39.0m (Numis: £37.0m).

"Trading across the Group in the first half of 2018 has been slightly ahead of expectations with margin progression in both Aerospace and Flexonics and the Group delivered another strong cash performance," said group chief executive David Squires.

On an adjusted basis, operating margins improved by 90 basis points to 8.3%, driving a 9% improvement in free cash flow to £32.2m, even as the company cut its net debt by £33.0m to £148.8m or 1.2 times' EBITDA.

Total sales on the other hand only rose by 2.6% to £523.3m, as negative exchange rate effects wiped £22.4m from the firm's top-line.

As expected, Senior benefitted from a 30% jump in the production of North American heavy-duty trucks during the first half, which benefited its Flexonics division.

However, although the upstream oil and gas markets were continuing to see increased drilling activity, the downstream O & G market remained "flat", management said.

That stood in apparent contradiction to talk among some analysts of a nascent recovery in the downstream sector.

Regarding the outlook for commercial aerospace, Senior said it "continues to be strong with good visibility due to the production ramp-up of new, more efficient, large commercial aircraft programmes."

Among those new programmes was Boeing's 737 Max, Airbus's A320neo, A350, C-Series and the F35 figher jet.

Reflecting the strong conditions across most of its businesses, the company's book-to-bill ratio for the first six months of the year stood at 1.2, with directors adding that they expected margins to improve on a full-year basis.

"At current exchange rates, the Board's expectation of making good progress in 2018 is unchanged, with performance still expected to be slightly weighted to the second half," Senior said.

"Looking further ahead, Senior is competitively positioned. We expect to make continued improvement as more new programmes and products enter production and ramp-up, and as the benefits from implementation of the Senior Operating System and cost saving actions continue to be delivered.

"[...] Overall, end markets are generally healthy, though we are watching with care any impact from the ongoing geopolitical trade discussions."

[brexitplus] 30/7/2018 09:08

Senior management clearout at GKN DRIVELINE. Swash plus others gone.

Plus Goldman increased its holding.

[brexitplus] 30/7/2018 08:12

Interesting Interims from Senior who are in similar markets to GKN and are doing what the GKN management should have been doing, and what Melrose will be “doing in spades.”

“ across the Group in the first half of 2018 has been slightly ahead of expectations with margin progression in both Aerospace and Flexonics and the Group delivered another strong cash performance.

Order books across most of our business remain strong with a book-to-bill of 1.2x in the first half of 2018. For the full year 2018, we anticipate year-on-year margin progression for the Group. At current exchange rates, the Board's expectation of making good progress in 2018 is unchanged, with performance still expected to be slightly weighted to the second half.

Looking further ahead, Senior is competitively positioned. We expect to make continued improvement as more new programmes and products enter production and ramp-up, and as the benefits from implementation of the Senior Operating System and cost saving actions continue to be delivered."

Senior up 6% in early trading.

[brexitplus] 30/7/2018 07:45

Hi Losos

Are Casey and Lara enjoying the cooler weather? Did you get lots of rain? Forecast for your area was pretty terrible. Was the thunder a problem for them?

We are pretty happy here. Grass is greening up and no nightly watering. All veg doing well except for salad and beetroots which didn’t enjoy the hot spell.

Still I’ll have plenty of time now to do as I wish as lady wife has won a contract to advise a subsidiary of a very well known organisation on their corporate governance. Big fees so perhaps a few more Melrose, Syncona and Burford shares.

[minerve] 29/7/2018 13:05

"For something you're 'not proud of' you seem to mention it a fair bit"

Not really. That is your 'attentional bias' in action because you are one of the sad individuals that values such things. Got to be seen at the golf club. Got to be seen travelling. Got to be seen at the posh restaurant. Boring!

[gettingrichslow] 29/7/2018 12:47

For something you're 'not proud of' you seem to mention it a fair bit! From one of the big Coutts spenders to lunch at Bill's 'as a treat' - that's quite a fall from grace - what went wrong??

[meanwhile] 29/7/2018 12:43

You're a thoughtful fellow, Minerve.

[minerve] 29/7/2018 12:15

MEANWHILE

Nice of you to release the rat. My daughter would force me to do something like that. Plenty of times I have found myself rounding up loose sheep on country lanes because of my daughter - the things you do as a loving parent and someone who cares about animal welfare. ;)

[minerve] 29/7/2018 12:13

gettingrichNEVER

I used to bank with Coutts, yes. It is nothing I'm proud of and not an item on a list you should want to aspire to. I run my investments better than them for many reasons. I was a top spender on their charge card one year and got invited to an evening at Van Cleef & Arpels, London, hosted by their CE.

[meanwhile] 29/7/2018 11:54

Yes, Minerve, and he'll continue to look a fool back here.

However, I am forced to acknowledge his persistence; he just won't give up his endless drivel.
I might have mentioned this before but he reminds me of a brown rat we had here a few months ago, continually gnawing into the hen house. Whatever I did to block it, it wouldn't give up. Eventually I caught it live in a cage trap and released it on the hillside a mile away, as a reward for its efforts.

[brexitplus] 29/7/2018 09:26

GKN Wheels has launched a new high-performance wheel to meet the demanding requirements of high-load capacity vehicles, with the new wheel capable of taking tyres with 13 bar pressure.

The wheel was developed by GKN Wheels’ engineering team specifically to meet the requirements of one of Europe’s leading manufacturers of aircraft tow tractors, Goldhofer AG. In particular it has been designed for the company’s latest tractors which are capable of moving the new larger generations of aircraft such as the Boeing 777 and Airbus A380.

GKN Wheels’ Product Manager, Ole Dall, said: “The design brief for the new tow tractor wheel was technically challenging, given that traditionally these wheel sizes work with tyres inflated to max 10 bars of pressure. Increasing this to 13 bars to cope with the tractors’ huge loading capacities was a significant step, but one which our design engineers were confident of achieving.”

The solution lay in GKN Wheels’ market-leading, patented Heat Impact Forming (HIF) manufacturing technology, which through a combination of forging and machining technology, enables the company to manufacture multi-piece wheels that are 50% stronger than conventional designed wheels.

Having agreed the design, GKN Wheels manufactured prototype wheels which were subjected to a series of operational tests at Frankfurt airport, with a range of data captured to measure the impact of the tyre pressure and loads on the wheel rim. Testing was completed in January 2018 and following analysis of the data, the new wheel was approved for use with tyres up to 13 bars of pressure. As a result, wheels are now successfully in serial production.

Ole Dall continued: “In such a safety-critical environment, where the consequences of any breakdown could have a huge impact on an airport’s operation, the wheel has been developed to the highest standards of safety, loading and quality.

“Naturally we are delighted to be involved in such a ground-breaking project, which we believe will not only deliver benefits to manufacturers such as Goldhofer, but also for operators in container ports and underground mines. These applications are similarly space-constrained, but they also share a requirement for high load capacity wheels with high tyre inflation pressure.”

[gettingrichslow] 29/7/2018 00:36

Is that the Lloyds thread where you were claiming to bank with Coutts, Minerve?

[minerve] 28/7/2018 23:53

brexitplus came to the Lloyds thread and could not handle the heat! LOL

He was out-smarted and made to look a fool!

He came back here with his tail between his legs! ROFLMAO!

[meanwhile] 28/7/2018 23:29

Some may expect to see a strong surge in the MRO price on Monday following this revelation.

Somewhere over the rainbow way up high,
There's a land that I heard of, once in a lullaby.

[brexitplus] 28/7/2018 10:19

GKN Powder Metallurgy has identified a promising application area for metal Additive Manufacturing in the production of copper inductor coils used for induction hardening processes. Induction hardening is used to increase the strength of components by users in the metal-processing industry, at automotive suppliers and in other fields where certain surface areas of components are required to withstand intensive mechanical loads and exposed to wear. The process is used to harden only the surface area of the component and does not have an effect on the internal hardness.

In induction hardening, a coil of highly conductive copper tubes, containing channels through which cooling water runs under high pressure, encloses the component. A high-frequency alternating current then flows through the induction coil, generating a powerful magnetic field which, in turn, induces eddy currents in the boundary layer of the component, giving off frictional heat. These eddy currents heat the component surface very quickly to the temperature required for hardening. Afterwards, it is quenched for sudden cooling.

The traditional manufacturing process for inductor coils relies on soldering, which the company explained is a complicated process which can create imperfections in the final product. Using metal AM, inductors can be produced which offer reproducible hardening results, three to four times longer service life, a shorter set-up time when used with hardening machines, and a reduction in operation and investment costs through better machine utilisation. In addition, the closer the shape of an inductor coil is to the shape of the component being hardened, the better the results of the induction hardening process – for this reason, the geometric design freedom offered by AM is a key advantage.

In an article on its GKN Powder Metallurgy Blog, the company stated that currently, awareness of the advantages offered by metal additively manufactured inductor coils remains low. “We predict that it will take another year before the industry understands this advantage,” stated article author Galina Ermakova, GPC Engineer for Additive Manufacturing at GKN Powder Metallurgy. “In a market like induction hardening, users aren’t eager to blindly trust that the first 3D printed inductors will work as needed.”

To help drive awareness and trust of AM inductors among users, Ermakova stated, “Users will have to intensively test and experience 3D printing first, and we need to schedule time for that. Once users gain confidence and realise that 3D printing delivers reproducible results, nothing will ever be the same.” GKN Powder Metallurgy is encouraging users to approach its team for a review of whether inductors are suitable for AM. For more complex designs, the team will support customers through the redesign process to achieve a more efficient geometry.

[brexitplus] 26/7/2018 15:08

Losos

Please tell Casey and Lara that they were so delicious that every bit was eaten. Sorry.

[losos] 26/7/2018 12:50

Sogoesit - MRO said they wouldn't be making any announcements before September which makes perfect sense to me, they have a lot to get to grips with, I also agree that when they do 'go public' they will want to have some good news so topping up before might be a good move.

gettingrichslow - 9 hours stuck on a train one day and interviewing graduates all day the next day aaaaaaarrrrrrghhhhhh you have my sympathy, hope the rest of the week is better for you at least Plus500 & Burford gave you something to smile about.

B+ Casey & Lara (Our dogs) want to know when those left over steaks are arriving haha.Just to let all reading this know, we are doing everything we can to keep them cool, so far they seem to be OK.

[sogoesit] 26/7/2018 07:29

Indeed b+ .... BUR lumpiness, in a positive direction, to be expected, coupled with portfolio management for risk in the negative direction hopefully.
As you say, turning around larger businesses is not an overnight exercise as anyone with experience of business will say.
Patience required on both fronts imv.

[brexitplus] 26/7/2018 07:06

Thanks sogoesit. Will look for the article. Good day for Burford yesterday. Melrose rather like Burford in that news comes infrequently.

[sogoesit] 26/7/2018 06:48

Full 2-page article in this week’s Shares Magazine “Great Ideas” section suggesting buy Melrose before “it updates on GKN value creation goals.”
Says analysts see 30% share price gain on a one year view based on margin improvement in aerospace to 13%-14% from 7.8% and in Driveline from 7% to 9%-10%.
Also says Deutsche Bank see disposals returning £787m from Nortek’s Ergonomics division and £3.1bn from the security and air management divisions in the next year or so.
Apologies for off-topic ;-). Please carry on gents.

[brexitplus] 26/7/2018 06:20

Hi Getting

Delays are a real pain. A few years ago my wife was travelling back from Lincoln to Cheltenham. A JCB digger ripped out the signal cables at Birmingham New Street. 10 hours for the journey and no-one knew what was happening. I was getting calls from my wife which I was relaying to the station staff!!!

Yes Burford figures yesterday were excellent and potential for a superb year. I doubled up on Tuesday so am very pleased.

[gettingrichslow] 25/7/2018 21:06

Not really, no! Lineside fires at York meant it took us 9 hours to get back on Monday. Then spent all day interviewing graduates on Tuesday. But good day for Plus500. And an even better one for Burford I see? 15%?

[brexitplus] 25/7/2018 18:12

Getting, have you recovered from your weekend in Scotland?