Melrose Industries PLC, UK, has published a trading update for the four months from January 1–April 30, 2021, with the company stating that it is trading modestly ahead of expectations, with the momentum seen in the second half of 2020 continuing into 2021. Sales in the period were reported to be 8% higher than in the same period in 2020.
The operating margins achieved in the first quarter of the year were reported to have continued to improve faster than expected. Cash generation for the group was also said to be encouraging, with Melrose being cash neutral in the first quarter, in what is traditionally a cash outflow period.
GKN Powder Metallurgy – consisting of GKN Sinter Metals, GKN Additive and GKN Hoeganaes – is reported to have seen a strong recent trading performance, with sales in the period being up 35% compared to the same period in 2020. The division was also up 1% on 2019 figures, with margins in the first quarter significantly higher than those achieved in the second half of last year and also higher than the same period in 2019.
Melrose added that its Powder Metallurgy business is gaining market share and improving its operations, both of which are trends it expects to continue.
The company added that it will be holding an Investor Day to discuss its Automotive and Powder Metallurgy divisions on May 20, allowing it to explain in more detail the improvement, growth, and new technology opportunities in these businesses.
“We are pleased with our start to the year and hopefully will see this momentum continue for the rest of the year. We are encouraged by the significant improvements made to the GKN businesses being reflected in their financial performance. We are confident that GKN will be as successful as previous acquisitions, a track record illustrated recently by the announced sale of Nortek Air Management,” stated Simon Peckham, CEO of Melrose Industries PLC.