Member Article

“Buy, improve, sell” delivers success for Melrose manufacturers

Manufacturing investor Melrose plc have reported strong half-yearly headline profits of £81.9m, up by a substantial 16%.

The company which operates on a business strategy of “buy, improve, sell” also completed the acquisition of Elster Group by Melrose’s wholly owned subsidiary, Mintford AG, for a consideration of £1.5bn.

A 9% rise in company revenue was reported for the first six months of 2012 , while the firm announced it would pay the same 2.6 pence interim dividend as they did in 2011, despite significantly enlarged share capital on account of a “Rights Issue”.

Melrose’s strategy of buying manufacturing businesses, turning the failings a company around and re-selling them, is a plan that Chairman Christopher Miller is pleased with.

He said: “These are another set of excellent results emphasising the quality of the Group and the continued success of our strategy to ‘buy, improve, sell’.

“We have now successfully completed our next acquisition, Elster, and look forward to growing further shareholder value from our enlarged group for the benefit of our shareholders.

“Economic conditions are difficult to predict at present but we are confident that our group companies place us in a good position to benefit from market opportunities.”

The acquisition of engineering group Elster will enable the company absorb the German firm’s capabilities into its existing business plan.

Melrose stated: “We believe there exists a significant opportunity to improve the performance of Elster over the next few years for the benefit of shareholders.”

This was posted in Bdaily's Members' News section by Miranda Dobson .