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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Melrose Industries Plc | LSE:MRO | London | Ordinary Share | GB00BNGDN821 | ORD 160/7P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
6.40 | 1.06% | 609.40 | 609.20 | 609.60 | 612.00 | 604.00 | 605.40 | 456,443 | 10:12:23 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Engineering Services | 4.93B | -1.02B | -0.7540 | -8.05 | 8.2B |
TIDMMRO
RNS Number : 7392I
Melrose Industries PLC
03 April 2020
The 2019 Annual Report and Notice of Annual General Meeting
Melrose Industries PLC (the "Company") announces that its Annual Report and financial statements for the year ended 31 December 2019 (the "Annual Report"), Notice of Annual General Meeting (the "AGM"), and Form of Proxy for the AGM have each been sent to shareholders, under the cover of a letter from our Chairman, Mr Justin Dowley ("Chairman's Letter"), and subject to the trading update released on 30 March 2020 ("Trading Update") which together confirmed that the previously proposed resolutions in relation to approval of the final dividend and the new long term incentive scheme have been withdrawn due to the continuing impact of the global outbreak of COVID-19. Please refer to those documents for further information. The Annual Report, Notice of AGM, Chairman's Letter and the Trading Update are available to view or download from the Company's website at https://www.melroseplc.net/investors/ .
The Company's AGM will be held at 11.00 a.m. on 7 May 2020 at Leconfield House, Curzon Street, London W1J 5JA.
PLEASE NOTE THAT IN LINE WITH UK GOVERNMENT GUIDANCE AT THE TIME OF PUBLICATION OF THE NOTICE OF AGM, THE COMPANY URGES ALL SHAREHOLDERS NOT TO ATT THE AGM IN PERSON, BUT TO MAKE USE OF PROXIES TO EXERCISE THEIR VOTING RIGHTS AND TO SUBMIT ANY QUESTIONS PRIOR TO THE MEETING USING THE SERVICE THAT THE COMPANY HAS SET UP FOR THESE PURPOSES.
If, despite this request, any shareholder nonetheless seeks to attend in person, the Chairman reserves the right to introduce further appropriate safety measures such as temperature checks and self-certifications, as well as to suspend the meeting immediately and seek an alternative time when it can be held safely and in accordance with UK Government guidance.
The Company's preliminary results announcement on 5 March 2020 included, in addition to the preliminary financial results, the text of the Chairman's statement, Chief Executive's review (including the Divisional review) and Finance Director's review, in each case as contained in the Annual Report. In the few short weeks since we announced our very successful set of 2019 financial results, the global situation has completely changed and we all face very difficult health and economic circumstances. As we release our Annual Report, the impact of this outbreak is still uncertain. However, it is clear that the language and tone of our preliminary results announcement, as reflected in our Annual Report, are no longer appropriate for 2020.
The appendix to this announcement sets out the required disclosures with regard to the Directors' responsibility statement, the principal risks and uncertainties and related party transactions, in each case as contained in the Annual Report. Together, this information is provided in accordance with Disclosure & Transparency Rule 6.3.5(2). This information is not a substitute for reading the full Annual Report for the year ended 31 December 2019.
The Company confirms that, in compliance with Listing Rule 9.6.1, an electronic copy of each of the Company's Annual Report for the year ended 31 December 2019, Notice of AGM and Form of Proxy for the AGM have been submitted to the National Storage Mechanism, appointed by the Financial Conduct Authority, and will be available shortly for inspection at www.morningstar.co.uk/uk/NSM .
Enquiries:
Montfort Communications:
Nick Miles, +44 (0) 20 3514 0897
Charlotte McMullen, +44 (0) 7973 130 669 / +44 (0) 7921 881 800
APPIX
Directors' Responsibility Statement
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;
-- the Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
-- the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.
Principal Risks and Uncertainties
This section outlines the principal risks and uncertainties that may affect the Group and highlights the mitigating actions that are being taken. This section is not intended to be an exhaustive list of all the risks and uncertainties that may arise, nor is the order of the content intended to be any indication of priority.
A risk management and internal controls framework is in place within the Group, which is continually reviewed and adapted where necessary to reflect the risk profile of the Group and to continue to ensure that such risks and uncertainties can be identified and, where possible, managed suitably. Each Group business unit maintains a risk register which is aggregated into an interactive data-driven dashboard reporting tool, to facilitate review by the Melrose senior management team, the Audit Committee and the Board.
Key risk Description and impact Mitigation Responsibility Risk Trend commentary Strategic trend priorities Strategic risks Acquisition The success of the Structured and Executive Following the Buy of new Group's acquisition appropriate management acquisition Improve businesses strategy depends on due diligence of GKN in 2018, and identifying available undertaken the Group improvement and suitable targets, on potential remains strategies obtaining any consents new targets focused or authorisations where permitted principally required and on improvement. to carry out an practicable. Whilst no large acquisition, Focus on acquisitions and procuring the acquisition were made in necessary targets 2019 financing, be this that have relative to the from equity, debt or strong headline 2018 GKN a combination of the fundamentals, acquisition, two. In making high-quality some acquisitions, products, small bolt-on there is a risk of leading market acquisitions unforeseen liabilities share but which were made by being later discovered are certain which were not underperforming businesses and uncovered their potential are expected to or known at the time and ability improve those of the due diligence to generate businesses. process, particularly sustainable in the context of cash flows and limited profit growth. access in public bids. Hands-on role Further, as per the taken by Group's strategy to executive buy and improve good Directors and but underperforming other senior manufacturing employees businesses, of the Group. once an acquisition Development of is completed, there strategic are risks that the plans, Group will not succeed restructuring in driving strategic opportunities, operational capital improvements expenditure, to achieve the expected procurement post-acquisition and working trading capital results or value which management. were originally Proper anticipated, incentivisation that the acquired of operational products management and technologies may teams to align not be successful, with Melrose or that the business strategy. may require significantly greater resources and investment than anticipated. If anticipated benefits are not realised or trading by acquired businesses falls below expectations, it may be necessary to impair the carrying value of these assets. The
Group's return on shareholder investment may fall if acquisition hurdle rates are not met. The Group's financial performance may suffer from goodwill or other acquisition-related impairment charges, or from the identification of additional liabilities not known at the time of the acquisition. ------------------------ ---------------- --------------- --------- ----------------- ----------- Timing of In line with our Directors are Executive Although global Sell disposals strategy experienced management M&A markets and depending where in judging and continue the Group is within regularly to experience the "Buy, Improve, reviewing the some Sell" cycle, the appropriate uncertainty expected time in a there timing of any disposal business cycle remain of businesses is for a disposal opportunities considered to realise for value as a principal risk maximum value realisation. which could have a for Some non-core material impact on shareholders. businesses the Group strategy. Each disposal were placed Further, due to the is assessed under Group's global on its merits, strategic review operations, with a key during 2019. there may be a focus on a However, significant clean disposal. management impact on the timings continue of disposals due to to remain political and disciplined macro-economic and there is no factors. Depending obligation to on the timings of sell disposals before it is and nature of the appropriate businesses' to do so. operations there may be long-term liabilities which could be retained by the Group following a disposal. Insufficient allowance for such retained liabilities may affect the Group's financial position. ------------------------ ---------------- --------------- --------- ----------------- ----------- Operational risks Economic and The Group operates, Regular Executive Geopolitical Buy political through manufacturing monitoring of management uncertainty Improve and/or sales order continued during Sell facilities, books, cash 2019. However, in numerous countries generation the Board notes and is affected by and other that economic global economic leading uncertainty conditions. indicators, can depress Businesses are also to ensure the business affected by government Group and valuations and spending priorities each of its this may and the willingness businesses increase of governments to can respond the number of commit quickly to potential substantial resources. any adverse acquisition Current global economic trading opportunities and financial market conditions. for Melrose. conditions, including This includes The Melrose continued headwinds the senior in the automotive identification management team sector of cost continues to and a continued reduction and actively slowdown efficiency engage with the in US new-build measures. executive teams residential Finance for of each division housing markets, any acquisitions to track the fluctuation in is readily potential commodity available to impacts of prices, the potential the Group from Brexit for a significant and banking and imposition prolonged global syndicates. of future recession This has proven expected and any uncertainty to be available tariffs, engage in the political to the actively with environment, Group even those may materially and during periods who are working adversely affect the of economic on the impact Group's operational downturn, for assessments and performance and example during mitigation financial condition, the global actions, and could have financial and report the significant crisis in 2008. material impact on the timing Short-term findings to the of acquisitions and inventory Board. Melrose disposals. buffers senior A recession may also are being management materially affect planned to team monitors customers, minimise key suppliers and other the initial issues with the parties with which impact of divisional the Group does Brexit management business. on import costs teams including Adverse economic and and tariffs the impact of financial market and border geopolitical conditions disruption. uncertainty on may cause customers Sales from the order books, to terminate existing EU to the cash orders, to reduce their UK within the generation, purchases from the GKN Automotive legal
Group, or to be unable and GKN and regulatory to meet their Aerospace threats and obligations divisions other to pay outstanding are frequently key operational debts to the Group. on ex-works and commercial These market conditions terms and indicators, to may also cause our therefore a ensure the Group suppliers to be unable cost and each of its to meet their to customers. businesses can commitments This continues respond to the Group or to to be reviewed appropriately change the credit terms in light to adverse they of the possible trading extend to the Group's terms on conditions. businesses. which the UK Tactics Since the period under fully departs for mitigating review, the UK left from the EU. the potential the EU on 31 January Strong customer impact 2020. There continues relationships of geopolitical to be uncertainty in built on uncertainty the UK regarding the long-term include nature of the UK's partnerships identifying cost future trading often with reduction and relationship plants in close operational with the EU and other proximity, efficiency international trading technical measures. partners with which excellence the UK intends to and quality. establish Planning for new terms on which potential to trade, and what discussions in this will mean for respect of business and the UK increased economy following tariff costs expiry that of the initial Brexit materialise if transition period on a 'No 31 December 2020. Deal' Brexit Whilst emerges when the long-term impact the initial of Brexit is not transition isolated period expires. as a principal risk The Group to the Group as a remains agile, whole, diversified and it does present well positioned potential to deal with risks that the business any short-term units continue to uncertainty in monitor the UK. and assess closely relating to potential changes to the cross-border trade and regulatory environment. The Board continues to assess and review mitigation plans. A significant amount of the Group's revenue is generated from operations located in North America, which this year has continued to (i) experience challenging tariffs relating to the US/China trade war; and (ii) require close monitoring of the expected short to medium- term impact of potential changes to international trading relationships following Brexit. The Group's exposure to these factors as a whole has been inherently mitigated since acquiring GKN, which created a more geographically balanced manufacturing footprint, and resulted in a larger proportion of the Group's revenue being generated from the UK and European-based GKN Aerospace and GKN Automotive divisions. Further, the Group's businesses operating in North America continue to take regular specific actions to mitigate the impact of new relevant North American tariffs and changes to international trading regulations by engaging with the relevant authorities prior to and after any such changes are implemented. Since the period under review, the potential rapid spreading of COVID-19 has become a significant emerging risk to the global economy. The Board continues to monitor the impact of the virus on the Group as more information about the epidemic emerges, with particular focus on the potential for staff shortages and production delays that could arise and potentially affect Group businesses' China-based operations and their supply chains, as well as monitoring how other operations around the world could become affected depending on the extent to which the virus spreads outside of China. ------------------------ ---------------- --------------- --------- ----------------- ----------- Commercial The Group operates The Group Executive The Melrose Improve in competitive markets continued to management senior throughout the world actively invest management team and is diversified in research actively engages across a variety of and development with the industries and activities divisional production in 2019 to executive and sales geographies. augment its teams to track, This provides a degree platforms for monitor and of Group-level impact future product support mitigation from the expansion, strategic potential commercial quality planning challenges and market improvements, activities and disruptions that face customer impact each of the divisions. alignment and mitigation Each division is achieving assessments in exposed further respect of to particular production ongoing commercial efficiencies. commercial and market risks, which Details about risks. are primarily some of the Particular focus accentuated Group's is placed on where research and certain customer/competitor development GKN Aerospace concentration is high activities are and
within their respective provided GKN Automotive market segments. in the ESG end-markets Melrose operates a report on pages where decentralised control 58 to 69 of the customer and/or and management 2019 Annual competitor structure Report. concentration which empowers Health and is high and divisional safety heavier management teams to awareness reliance is take full initiatives and placed responsibility performance on supply chain for planning, enhancements efficiency and mitigating, continued programme navigating and to be partner responding implemented in management. The to the specific alignment divisional CEOs commercial with report material risks and challenges regulation, updates directly facing their respective market to members of businesses. The Melrose practice and the senior management team site-based Melrose senior monitors the aggregated risk management team impact of such risks assessments and which maintains and provide active requirements. a number of support and challenge Further details contact to the divisional are provided points management in the throughout teams in fulfilling nonfinancial the Group to their responsibilities. KPIs increase Common commercial risk on pages 36, awareness. The areas that potentially 37, 65 of Group continued affect a large the 2019 Annual to actively proportion Report. invest of the Group's Since acquiring in research and businesses GKN, the development include those related Melrose senior initiatives to production quality management during 2019 to assurance, health and team has augment its safety performance, actively platforms customer concentration engaged for future and uncertainties with and expansion, related supported the to benefit to future customer GKN businesses' product demand, onerous divisional quality customer management improvements and supplier contracts, teams in and increased the impact of increased identifying customer competitive pressures embedded alignment, and on the maintenance/ contractual and to achieve improvement of market business further share, potential conduct risks production disruptions relating to key efficiencies. to supply chains and supply increases to the price chain and of raw materials, production technological programme innovation and market partners. Those disruption, and the management performance and teams have management continued to of programme partners implement and (the "Common Commercial direct a Risks"). series of operational change management programmes to mitigate the risks they have identified. The Melrose senior management team, in collaboration with Ernst & Young, enhanced the Board and Audit Committee's visibility of the Group's Common Commercial Risks during 2019 by building and implementing an intelligent, data-driven Group reporting dashboard to automate the aggregation and reporting of numerous Common Commercial Risks across each of the Group's divisions, including those identified from the diligence efforts and site visits undertaken to prepare the GKN opening Balance Sheet during 2018, and ongoing divisional risk reporting. ------------------------ ---------------- --------------- --------- ----------------- ----------- Loss of key The success of the Succession Executive Succession Buy management Group is built upon planning within management planning Improve and strong management the Group is remains a core Sell capabilities teams. coordinated focus for the As a result, the loss via the Nomination of key personnel could Nomination Committee and have a significant Committee the impact on performance, in conjunction Board. at least for a time. with the Succession The loss of key Board and planning of personnel includes all executive
or the failure to plan Directors and Directors and adequately for senior Group senior succession employees. In management, or develop new talent line with together may impact the the Group's with visibility reputation decentralised of potential of the Group or lead structure, each successors to a disruption in divisional within the the leadership of the CEO, in Group, business. Competition consultation will remain an for personnel is with area of intense the Chief particular and the Group may not Executive, is management focus be successful in responsible for in 2020. attracting the appointment or retaining qualified of their personnel, particularly respective engineering executive professionals. team members, with disclosure to the Nomination Committee via the Melrose senior management team. The Company recognises that, as with most businesses, particularly those operating within a technical field, it is dependent on Directors and employees with particular managerial, engineering or technical skills. Appropriate remuneration packages and long-term incentive arrangements are offered in an effort to attract and retain such individuals. ------------------------ ---------------- --------------- --------- ----------------- ----------- Compliance and ethical risks Legal, Considering the Regular Executive Each business Improve regulatory breadth, monitoring of management has and scale and complexity legal a fully environmental of the Group, there and regulatory developed is a risk that the matters legal function, Group may not always at both a Group headed by their be in complete and business respective compliance unit level. General with laws, regulations Consultation Counsel or permits. The Group with external reporting could be held advisors to their responsible where executive for liabilities and necessary. management team, consequences arising Group-wide and are properly from (i) past or future standard and staffed and environmental damage, enhanced supported including potentially application to by significant trade external remedial costs; (ii) authorisation advisors employee matters procedures where necessary including are in place or helpful to liability for employee and regularly ensure accidents in the reviewed ongoing workplace against the compliance or consequences of ever-changing in the environmental global trade jurisdictions liabilities, compliance in which they which may be landscape, operate susceptible supported by across the to class action law access to globe. suits, particularly external trade This is but not exclusively compliance augmented with respect to Group legal and by central businesses operating regulatory oversight in North America; (iii) specialists and from the Melrose restrictions arising electronic legal team and from economic counterparty robust annual sanctions, screening reviews export controls and systems. to ensure it has customs, which can Our businesses a strong legal result in fines, are validated and compliance criminal and certified framework and penalties, adverse in respect considers publicity, payment of quality the risk to be of back duties and management, consistent with suspension or environmental prior years. revocation management of the Melrose Group's and health and import or export safety with privileges; the appropriate and (iv) product bodies liability including ISO claims, which can and BS OHSAS, result where relevant in significant total to their liability or remedial operations. The costs, particularly Group's for products supplied businesses are to large volume global either already production programmes compliant with spanning multiple or working years, towards timely for example in the compliance aerospace and with new and automotive upcoming industries, or to standards. consumer This includes end-markets for example Group in the air management businesses industry. There can that are also be no assurance currently that any provisions certified to for expected BS OHSAS 18001 environmental and are
liabilities and actively remediation driving towards costs will adequately full transition cover these liabilities to ISO or costs. 45001:2018. The Group operates A robust in highly regulated control sectors, which has framework been accentuated by is in place, the GKN acquisition. underpinned In addition, new by legislation, comprehensive regulations or corporate certification governance and requirements may compliance require procedures at additional expense, both a Group restrict commercial and business flexibility and unit level. business Where possible strategies or introduce and additional liabilities practicable, for the Group or due diligence Directors. processes For example, the during the Group's acquisition operations are subject stage seek to to anti-bribery and identify anti-corruption, legal, anti-money regulatory laundering, and competition, environmental anti-trust and trade risks. compliance laws and At the business regulations. Failure unit level, to comply with certain controls are in regulations may result place to in significant prevent such financial risks from penalties, debarment crystallising. from government Any contracts environmental and/or reputational risks damage, and may impact that our business strategy. crystallise are subject to mitigation by specialist consultants engaged for this purpose. External consultants assist the Group in complying with new and emerging environmental regulations. Insurance cover mitigates certain levels of risk and the Group's insurers are instructed to carry out external audits of specified areas of legal and compliance risk including health and safety. ------------------------ ---------------- --------------- --------- ----------------- ----------- Information Information security Management Executive Information Improve security and and cyber threats are continues to management security cyber threats an increasing work with its and cyber priority across all business threats industries and remain leaders and are an a key UK Government external increasing agenda item. security priority across Like many businesses, consultants to all industries. Melrose recognises better Cyber security that the Group may understand breaches of the have a potential the Group's Group's IT exposure increased systems in this area. Potential exposure could result in exposure to such risks to cyber the remains high due to security risk misappropriation the scale, complexity and to ensure of confidential and public-facing appropriate information nature mitigation belonging of the Melrose Group. measures are to it or its In addition, Melrose in place for customers, recognises that the the Group. suppliers or inherent security In 2019, employees. threat Melrose In response to is considered highest completed the increased in GKN Aerospace where the deployment sophistication data is held in of its of information relation information security and to civil aerospace security cyber technology and strategy and threats, the controlled risk-based Group defense contracts. governance has worked, and framework to continues to all businesses work, within the with external Group. The security framework companies to follows monitor, the UK improve and Government's refine recommended its Group-wide steps on cyber strategy to aid security. the prevention, This strategy identification has enabled and mitigation risk profiling of any threats. and mitigation plans to be developed for each business to mitigate and reduce their exposure to cyber risk. As part of Melrose's overall information security strategy, IT Security awareness training was deployed to all Melrose businesses. The progress of each business
is measured against the information security strategy and is monitored on a quarterly basis. ------------------------ ---------------- --------------- --------- ----------------- ----------- Financial risks Foreign Due to the global The Group Executive Group results Buy exchange nature policy is to management are Improve of operations and protect against reported in Sell volatility the majority Sterling in the foreign exchange of foreign but a large market, exchange rate exchange risk proportion fluctuations have, which affects of the revenues and could continue cash, by are denominated to have, a material hedging such in currencies impact on the reported risks with other results of the Group. financial than Sterling, The Group is exposed instruments. primarily US to three types of Protection Dollar currency against and Euro. risk: transaction risk, specific Following translation risk, and transaction the GKN the risk that when risks is taken acquisition, a business that is by the Board on the Group has predominantly based a case-by-case exposure in a foreign currency basis. on both a is sold, it is sold transactional in that foreign and currency. translational The Group's reported basis to more results will fluctuate currencies. as average exchange Sensitivity to rates change. The the key currency Group's pairs is shown reported net assets in the Finance will fluctuate as the Director's year-end exchange rate review changes. on pages 38 to 44 of the 2019 Annual Report. ------------------------ ---------------- --------------- --------- ----------------- ----------- Pensions Any shortfall in the The Group's key Executive Although the Buy Group's defined benefit funded management risks Improve pension schemes may UK defined are well Sell require additional benefit pension understood funding. As at 31 plans are and funding December closed to new plans 2019, the Group's entrants and for the GKN pension future service Schemes schemes had an accrual. have already aggregate Long-term been deficit, on an funding agreed with accounting arrangements Scheme basis, of GBP1,121 are agreed trustees, the million (2018: GBP1,413 with the size million). Changes in trustees and of the gross discount rates, reviewed liabilities inflation, following as a proportion asset values or completion of of the Group's mortality actuarial net assets assumptions could lead valuations. remains to a materially higher Active significant. deficit. For example, engagement with During the cost of a buyout trustees on the period, on a discontinued basis pension plan gross uses more conservative asset liabilities were assumptions and is allocations and reduced as a likely to be strategies. result significantly On 1 July 2019 of people higher than the the large leaving accounting UK GKN defined group schemes on deficit. benefit the sale of Alternatively, if the pension scheme their plans are managed on was split employer an ongoing basis, there into four new company, is a risk that the schemes, voluntarily or plans' assets, such two of which through an as investments in have been insurance equity allocated to buy-out, which and debt securities, GKN Aerospace together with will not be sufficient and two to GKN contributions to cover the value Automotive, of GBP185 of the retirement in order to million benefits more (including the to be provided under appropriately balance of the the plans. The balance initial GBP150 implications liabilities million funding of a higher pension across commitment to deficit include a supporting the direct businesses. GKN schemes) and impact on valuation, the better implied credit rating hedging and potential of interest and additional inflation risks funding requirements decreased both at subsequent triennial the overall reviews. In the event liability of a major disposal and volatility that generates risk to the
significant Group. cash proceeds which are returned to the shareholders, the Group may be required to make additional cash payments to the plans or provide additional security. ------------------------ ---------------- --------------- --------- ----------------- ----------- Liquidity The ability to raise To ensure it Executive The Group is Buy debt or to refinance has management satisfied Improve existing borrowings comprehensive that it has in the bank or capital and timely adequate markets is dependent visibility of resources on market conditions the liquidity available and the proper position, to meet its functioning the Group liabilities. of financial markets. conducts As set out in more monthly detail in the Finance reviews of its Director's review on cash forecast, pages 38 to 44 of the which are in 2019 Annual Report, turn revised the Group has term quarterly. loans of US$960 million The Group and GBP100 million operates cash and revolving credit management facilities comprising mechanisms, US$2.0 billion, EUR0.5 including cash billion and GBP1.1 pooling billion. across the In addition, the GKN Group and net debt at acquisition maintenance included capital market of revolving borrowings across three credit unsecured bonds that facilities totalled GBP1.1 to mitigate the billion. risk of Two of these bonds any liquidity - totalling GBP750 issues. million - remain The Group outstanding gained as at 31 December 2019 agreement and further detail from its is provided in the lenders to a Finance Director's three-year review on pages 38 extension, at to 44 of the 2019 the Group's Annual option to be Report. built into Furthermore, in line its with the Group's multi-currency strategy, term investment is made loan in the businesses denominated (capital GBP100 expenditure in excess million and of depreciation) and US$960 million, there is a requirement exercisable at to assess liquidity any time and headroom when new prior to 1 businesses are April 2021 acquired. that would In addition, the Group extend the may be unable to maturity refinance date of the its debt when it falls loan to April due. 2024. The Group operates a conservative level of headroom across its financing covenants which is designed to avoid the need for any unplanned refinancing. ------------------------ ---------------- --------------- --------- ----------------- -----------
Related Party Transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
In the ordinary course of business sales and purchases of goods take place between subsidiaries and equity accounted investment companies priced on an arm's length basis. Sales by subsidiaries to equity accounted investments in the year ended 31 December 2018 totalled GBP28 million (2017: GBPnil). Purchases by subsidiaries from equity accounted investments in the year ended 31 December 2018 totalled GBP14 million (2017: GBPnil). At 31 December 2018, amounts receivable from equity accounted investments totalled GBP6 million (31 December 2017: GBPnil) and amounts payable to equity accounted investments totalled GBP2 million (31 December 2017: GBPnil).
Sales to and purchases from Group companies are priced on an arm's length basis and generally are settled on 30-day terms.
Year ended Year ended 31 December 31 December 2019 2018 GBPm GBPm Short-term employee benefits 4 3 ------------- ------------- Share-based payments 9 9 ------------- ------------- 13 12 ------------- -------------
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
ACSEAPLDESSEEEA
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April 03, 2020 06:04 ET (10:04 GMT)
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