The Group reported a statutory pretax loss of £69m, but underlying profits hit £96.4m
Companies: Melrose Industries PLC
Shares in Melrose Industries jumped 14% on Thursday after the investment firm exceeded market expectations in its full-year results to 31 December 2016.
The Group reported a statutory loss-before-tax of £69.3m due to non-trading and acquisition costs, however, on an underlying basis, the firm earned a pre-tax profit of £96.4m, significantly greater than the £2.4m profit it made in 2015.
Also, despite adverse forex translational effects on dollar debt, Melrose Group's net debt has been reduced to £541m, reflecting strong cash generation.
The key to today's results was the performance of Nortek, acquired by Melrose for £2.2bn in August. Melrose says the firm has "responded well" to Melrose ownership and had "materially" outperformed in its short four-month period.
The boost to results by Nortek was partially offset by struggling Brush, now eight years under Melrose's ownership, which is reportedly experiencing adverse trading headwinds.
Melrose' Board has raised its dividend to 1.9p a share and is reportedly looking for its next acquisition.
Chairman Christopher Miller said it had been a "tremendous" year for the company. He highlighted the performance of Nortek, which is exceeding expectations, saying all aspects of the business were improving and its prospects were better than Melrose had originally thought.