Melrose boosts full-year guidance for margins

(Sharecast News) - Aerospace outfit Melrose upgraded its full-year guidance thanks to the continued "strong" aftermarket demand in its Engines business. Operating margins at the unit were now seen hitting about 24%, instead of the 22% projected in May.

In turn, that outcome was seen cementing its prior target for a six percentage point improvement in margins by 2025.

"Melrose has full confidence that the 2025 targets will be achieved and current trading makes that more secure," the engineer said in a statement.

"Melrose has full confidence that the 2025 targets will be achieved and current trading makes that more secure."

Engines generated 80% of Melrose's profits with the remainder coming from Structures.

Of those profits, four-fifths came from the aftermarket segment.

Management also highlighted the "strong long-term" demand for the company's "breakthrough" technologies in engines.

Furthermore, the recent GTF updates implied generally increased pricing in aftermarket within a supply constrained industry and the potential for legacy engines to fly for longer, both of which would benefit Melrose.

A further trading update was scheduled for November.

As of 0933 BST, shares of Melrose were advancing 1.78% to 487.0p.