Melrose Industries Share Discussion Threads

[gettingrichslow] 07/9/2018 09:59

Neither Minerve nor Meanwhile have actually offered an answer to my question of course! It's hardly an 'obtuse' question. Is 1.5% of shareholder value created unreasonable? If you think it is then explain what would be reasonable!

[minerve] 07/9/2018 09:42

Playtech said on Friday that it had sold all of its holdings in Plus500 — amounting to almost 10 per cent of the company’s shares — a day after five founders of the online trading platform disclosed plans for a share sale worth £145m at the same price.

Looks like 'The Money' is getting out. LOL

[minerve] 07/9/2018 09:24

Well, if they give themselves £50M each that is £150M not spent on R&D, buy-backs and dividends. Will their competitors do the same or will they have the sense to apply retained earnings in a better direction? Eventually the difference will be telling but The Three Amigos will be long gone.

[minerve] 07/9/2018 09:13

What on Earth gives these morons any right to have a disproportionate take from GKN - a company that has been around for over 100 years? What have they done to deserve this?

Used somebody else's cheap money and applied asset stripping. That is it. Money for old rope. They can dress it up as some clever process but it is nothing more, nothing less.

Only a moron would defend such behaviour.

When the wealth gets more narrowed and the control of society by the few becomes more visible will people start to see the mistakes of the last two decades. By then, it will be too late.

[minerve] 07/9/2018 09:06

Good post MEANWHILE.

I suppose getting is defending the indefensible. He is always obtuse over these things.

[gettingrichslow] 06/9/2018 20:49

Meanwhile, the £75m bonus they shared was huge, there is no denying that. But it is only 1.5% of the shareholder value they have created. Is that unreasonable? They take 1.5% plus salary. Shareholders take the remaining 90+%? What would you say was reasonable if you think that is unreasonable?

[meanwhile] 06/9/2018 20:33

Losos says of MRO's results "I did like the dividend increase, hope they can hold it around that level".
This is presumably a reaction to the report statement declaring "The Board has declared an interim dividend of 1.55 pence per share (2017: 1.4 pence), an 11% increase on last year.

A dividend increase of almost 4X the rate of inflation. Impressive, eh?
Yes, the words say one thing, but the numbers say another.

1.55p is 0.67%. The total dividend payout, across almost 5B shares in issue, is around £75M.
This is less than half of the total single payout of bonuses to the big 4 directors earlier this year.

The board must be hoping, as Losos does, that "they can hold it around that level".

[brexitplus] 06/9/2018 20:11

TRADING STATEMENT

Last year this was on 21 November 2017.

Should here more about sale of businesses before then - hopefully!!

[brexitplus] 06/9/2018 19:47

GKN AEROSPACE REDUCING WASTE

The US-based 3D printing manufacturer, Stratasys, has confirmed that GKN Aerospace is upgrading its production times and removing design constraints for multiple tooling applications since utilising additive manufacturing at its UK headquarters.

The aerospace manufacturer, GKN, is set to invest in Stratasys’s F900 Production 3D printer with the aim of reducing lead times for production-line tools, in addition to creating complex parts which can’t be made through the use of traditional manufacturing methods.

Tim Hope, Additive Manufacturing Centre Manager, at GKN Aerospace, said: “Since integrating the F900, we have dramatically reduced production-line downtime for certain teams and are enjoying a new-found freedom to design complex tools.”

It is anticipated that GKN serves more than 90% of the aircraft and engine manufacturers in the world and provides the companies with engine systems, aerostructures and technologies.

“We can now cost-effectively produce tools for our operators within three hours,” Mr Hope continued.

“This saves critical production time, and by printing in engineering-grade thermoplastics, we can produce 3D printed tools with repeatable, predictable quality every time. All while matching the quality of a traditionally-produced tool, and reducing the costs and concessions compared to equivalent metallic tooling.”

It has also been revealed that GKN has also confirmed a reduction of 40% in its material waste as a result of the decision.

[mattboxy] 06/9/2018 19:28

I'd love to say it was my detailed research and understanding of the current GKN business progression but no!! A random guess

[brexitplus] 06/9/2018 19:01

Well done mattboxy.

Melrose 4+% better than the FTSE100.
Positive.

[gettingrichslow] 06/9/2018 18:04

After a tight finish, the winner is....

MATTBOXY!!

Well done. You should receive a life size (2 inch by one inch) photo of Meanwhile's wallet stuffed with old £1 notes within 7 days.

[losos] 06/9/2018 16:39

B+ Post 5615 - Good summary. I did like the dividend increase, hope they can hold it around that level.

[losos] 06/9/2018 16:28

MEANWHILE - Haven't sat on a bike for 30 years. About 20 years ago when we moved house I took the old 'fold up' one with us, it sat in the old barn rusting, when we moved again 4 years ago I left it there haha. As you probably know in the 'canine' world 'loyalty' ranks higher than anything else. I am basing my view on MRO in the same way, at least until there's a good reason not to do so. So far so good.

[brexitplus] 06/9/2018 16:28

HL OPINION - Sums Melrose up pretty well.

Melrose is a strange beast, and has a more in common with a private equity firm than a normal listed business. It buys struggling industrial groups, improves their performance and sells them on.

Since listing on AIM in 2003 with a market capitalisation of £13m, the group reckons it has created around £5bn in shareholder value. It has delivered an average annual return on investment of some 25% a year.

Of course there's no guarantee that it can replicate that performance going forwards, and its most recent deal - acquiring automotive and aerospace engineer GKN in the largest hostile takeover the UK has seen in years - is its' biggest to date. Big transactions always come with risk, and investors are placing a lot of trust in management to be able to execute a complex deal well.

GKN joins an existing portfolio that includes ventilation and air conditioning specialist Nortek and generator group Brush, but dwarfs both. It's the success of Melrose's turnaround of GKN's aerospace and automotive businesses that matters.

It's still very early days, but Melrose has plans to improve margins at both businesses through a combination of investment and reducing costs. The first step has seen Melrose strip out the central GKN management team, allowing each of the underlying businesses to function independently. Initial progress is said to be good.

One of the side effects of the deal has been a dramatic increase in debt. The group has also taken on GKN's sizeable pension deficit which has a significant claim on proceeds from asset sales.

The need to settle some of these liabilities probably explains why Melrose is already looking for a buyer for GKN's powder metallurgy business. £270m of the proceeds from any sale need to be paid into the pension, but it was never a major focus for Melrose, so an early get out makes sense.

Going forwards, Melrose's 'turnaround and sale' approach means the dividend shouldn't be the major pull - although the 2% prospective yield is certainly welcome. Instead investors will have to wait for the more unpredictable capital returns that follow a disposal. Given the need to pay down debt, those are likely be some time away. But if Melrose can stick to form then the long term rewards could be substantial.

[brexitplus] 06/9/2018 15:57

Thanks Losos. The summary is from the Analyst Presentation on the Melrose website. Although I am a mathematical genius I’m not an accountant so leave that to the experts.

However, I am more than pleased with the interims. Remedial actions and investment in developing the divisions look very good. Once the acquisition expenses have worked their way through, and Metallurgy plus the other smaller businesses are sold off, the rump of Aerospace and Auto will look to have been acquired at a big discount.

PS Yertiz starting to look good!!!

[meanwhile] 06/9/2018 14:59

Brexit is so amusing. He makes judgements based on no data whatsoever.

[minerve] 06/9/2018 12:21

Mmmmm, I obviously underestimated the 'fan boys' love of mediocre results.

[brexitplus] 06/9/2018 11:24

Morning all. Just been looking for big hats for our nieces wedding. Not for me!!!

Will be interested to see analysts reports.

Losos don’t buy a bicycle from Wales. You need the business to still exist if there is a fault.

Enjoy doing up your table and chairs.

Yertiz. Plus doing well again today as is Syncona.

[meanwhile] 06/9/2018 10:42

Losos,

Thank you for your deep concern. I have always seen you as a true 'Gentleman', despite your love of dogs. I do hope Melrose eventually move into some 'canine' business area, as the site will then have yourself as an additional expert to add to the current trio.

I have no use for a calculator; I use mental arithmetic only, on the grounds that no calculation in the stock market warrants the precision of a calculator.

I would suggest getting rid of the patio table and chairs and buy some bicycles to sit on.

[minerve] 06/9/2018 10:14

Not in the stores you go to. LOL

[losos] 06/9/2018 10:07

B+ Ref post 5604 thanks for the summary. Looking good. I missed the deadline yesterday for bids on the closing SP, I did think about a late entry but I never win these competitions so withheld haha.

MEANWHILE I expect you will be busy on your calculator after these results, the poor old thing (the calculator not you) may get overheated so may I suggest a small desk fan placed behind may stop the thing from self igniting which we wouldn't want.

My project for today is to renovate the patio table and chairs which we inherited when we bought this place. They are looking a bit shabby. It would probably cost less to buy a new set but this one is made from hardwood (Probably Beech) and you can't buy that in the stores anymore.

[meanwhile] 06/9/2018 09:54

My questions were answered in part only.

Will the rejuvenation of GKN be seen to have begun? - The board says so but Financials not showing yet.
Will the huge markup of Melrose's share price on the back of Nortek be seen as
justified? - Some doubts now creeping in, more could follow.
Will the real reason for delaying Ergotron's sale be revealed? - Yes, poor performance at Ergotron.
Will Melrose move into the 'dog breeding' market. - Possibly, as a means of generating growth at any cost.
Do the numbers matter at all or is sentiment the key to share price? - Yes, the numbers matter but blind faith still prevails and numbers are not yet taken too seriously.