Melrose Industries Share Discussion Threads

[essentialinvestor] 05/1/2022 09:05

Lovely start to the year.

[bmel] 04/1/2022 13:36

We seem to be in a good recovery run. Nice to see.

[essentialinvestor] 22/12/2021 12:57

Hi Darrin and apologies for the late reply.

I think you make an interesting point which if validated,
might see some January volatility.

In terms of MRO there looks to be support around the low 140's atm?,
it has found buyers from this area a number of times so added on Monday
at that level. Obvs if wider markets were to tank that area may well give way.

My best guesstimate is Melrose already discounts a hell of a lot of bad news
and there is significant upside if we can get back to something resembling normality -
which I hope March onwards will look like, but no guarantees as always. Good fortune.

[darrin1471] 20/12/2021 16:33

EI. Saw you just added a few MRO.
My Omicron concern here is how China will react. China has already achieved the near impossible by keeping various covid strains under control. Now early results show China's vaccine does not produce antibodies effective against Omicron.
The minimum China is going to have to do is lockdowns. South Korea, Singapore, Vietnam, Australia and New Zealand were all doing well before falling in various extents to Delta.
I don't think even China will be able to lockdown Omicron. If China can't then the spread could be so fast and devastating in a population with very low antibodies.
Severe lockdown or mass infection surely equals more supply chain chaos and market troubles.

[essentialinvestor] 28/11/2021 14:53

Thanks for the view.


Bought 8% back of my previous holding on Friday and
if feeling brave may add a small amount more tomorrow, depending on price

One of the best management teams in the entire LSE, but aerospace not the best
sector, MRO more than just aerospace though.

Unfortunately it's a triple hit with semiconductor chip shortages impacting the
auto sector and their powder metallurgy business.

[roguetraderuk] 26/11/2021 17:27

its the aero exposure isnt it, so got thrown to the wolves today. 141 is a pivot then 127 which would be pre vaccine levels. i would add there and there or look for tech reversal in those zones if just trying to trade it.

[essentialinvestor] 26/11/2021 09:42

A potential upside, stress on potential, is the new variant could be
more transmissible but produce less symptomatic cases as a trade off.
(early indications suggest this with Delta +).

Live with depression so not usually a glass half full person!,
but hoping that may be the case, if so it's a longer term upside.

However, yes some caution may be the wiser path ATM as we don't know.

[gettingrichslow] 26/11/2021 09:36

Essential, good timing on your sale! Who knows what will happen next but it’s looking grim for airlines again that’s for sure.

[essentialinvestor] 26/11/2021 09:32

Back in for just a small amount only.


Any views on current events?.

[essentialinvestor] 19/11/2021 14:11

Unlucky with your timing, this week's COVID news from Europe is a major headwind,
at least short term. I've sold my position until developments become clearer, luck to holders.

[essentialinvestor] 03/11/2021 12:14

GKN's eDrive system is class leading in the transition to EV's


Their aerospace division is investing in hydrogen propulsion for sub regional
air travel. Longer term hydrogen may replace existing jet fuel for regional
airline travel.

GKN aerospace focussed on supplying products than enhance flight efficiency,
helping to reduce overall carbon footprint.





Melrose looks a cheap way to benefit from the longer term shift to a lower carbon economy.

[essentialinvestor] 28/10/2021 11:56

Either way I see very significant upside for Melrose over the next 2-3 years fwiw,
all be it with plenty of bumps in the meantime re the SP, as has always been
the case with MRO.

[mayers] 28/10/2021 11:23

Thanks EI.

[essentialinvestor] 28/10/2021 08:22

Hi mayers. FT reported earlier this year Melrose were looking
towards the end of 2021 for their next major acquisition.
That was before the semiconductor shortage hit the powder metallurgy business
and GEC auto division. I would guess at the time they planned for PM to be sold by now.

Over the last 12 months continued strength in equity markets has allowed private equity
to dispose of significant assets leaving that sector awash with cash, so my point is
MRO now likely to face significant competition from PE for their next target.

As a result they may focus on organic growth options for the various GNK businesses,
or perhaps smaller bolt on buys. A sale of the entire business may also
be a possibility if the right offer emerges? - but your guess on that may be better than mine.

[mayers] 27/10/2021 22:30

EI How would this square with Melrose's stated commitment to preserve the UK basis for GKN? In this light I can understand the Melrose CEO's recent advocacy of UK acquisitions of foreign companies rather than US PE takeovers (I think I have recalled that correctly)

[essentialinvestor] 27/10/2021 18:05

Melrose may again run in to a similar situation as happened with Wassall Plc,
their previous investment vehicle - where they eventually could not compete with PE
bids for acquisition targets and decided to sell up, later establishing Melrose on an initially smaller scale.

PE are absolutely awash with cash again.


There are organic opportunities as with the creation of the specialist hydrogen
business, which may be a very significant future global opportunity.

[jackdaw4243] 27/10/2021 14:51

At this price some well financed American company will be running the numbers, I had a good return on "Megget and Laing" but worry about the U K long term as we are cheap.

[essentialinvestor] 24/10/2021 17:15

FT from May - Melrose banks on hydrogen storage in push to go green.

One of the articles not behind a paywall from earlier this year

[bmel] 24/10/2021 11:52

Interesting article in Sunday Times business supplement on role of hydrogen in getting to net zero.

Mentions Melrose as having developed a hydrate that acts as a hydrogen storage process for remote location backup power. Warm it up and it releases hydrogen into a fuel cell. This is being tested on location and Melrose plan to establish a separate hydrogen business.

Very, very interesting indeed.

[essentialinvestor] 23/10/2021 00:17

Hi Stuart, appreciate the reply, many thanks.


On Melrose the next update, possibly the next two, might see a guidance cut.
Would expect some of that eventuality is now factored in to the SP, but not all.

[stuarti10] 22/10/2021 23:08

I work for a major OEM. Unfortunately light is not at the end of the tunnel, the next few months will be some of the toughest yet for volumes.

[essentialinvestor] 22/10/2021 12:59

Any views here on semiconductor chip shortages further impacting
business over the next 6-12 months?.

Renault this morning warning they may be forced to further cut production
due to persistent shortages.

[essentialinvestor] 05/10/2021 14:09

Supply issues hitting parts of the business.

[essentialinvestor] 09/9/2021 08:52

Had a look at the H1 presentation, 50% of their efficiency improvement projects
at GKN aerospace are underway already, the remaining programmes to commence
through H2.

Looks like a big push to improve margins.

[essentialinvestor] 09/9/2021 08:12

Results day gap at £1.70 approx tone filled ?.