LSE:MRO

Stock Analysis Report

Executive Summary

Melrose Industries PLC engages in the aerospace, automotive, powder metallurgy, air and security, and other industrial businesses.

Snowflake

Fundamentals

Moderate growth potential with imperfect balance sheet.


Similar Companies

Share Price & News

How has Melrose Industries's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

10.3%

MRO

8.7%

GB Electrical

2.3%

GB Market


1 Year Return

23.0%

MRO

20.0%

GB Electrical

2.5%

GB Market

Return vs Industry: MRO exceeded the UK Electrical industry which returned 20% over the past year.

Return vs Market: MRO exceeded the UK Market which returned 2.5% over the past year.


Shareholder returns

MROIndustryMarket
7 Day10.3%8.7%2.3%
30 Day-0.5%-0.3%-1.3%
90 Day11.1%9.7%-1.9%
1 Year26.0%23.0%22.7%20.0%7.4%2.5%
3 Year24.6%17.4%20.0%13.8%18.8%4.3%
5 Year377.1%-88.9%228.5%-87.1%36.4%6.8%

Price Volatility Vs. Market

How volatile is Melrose Industries's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Melrose Industries undervalued compared to its fair value and its price relative to the market?

1.3x

Price to Book (PB) ratio


Share Price vs. Fair Value

Undervalued: MRO (£2.08) is trading above our estimate of fair value (£1.83)

Significantly Undervalued: MRO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MRO is unprofitable, so we can't compare its PE Ratio to the Electrical industry average.

PE vs Market: MRO is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

Low PEG Ratio: Insufficient data to calculate MRO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: MRO is good value based on its PB Ratio (1.3x) compared to the GB Electrical industry average (1.7x).


Next Steps

Future Growth

How is Melrose Industries forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

47.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MRO is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.2%).

Earnings vs Market: MRO is forecast to become profitable over the next 3 year, which is considered above average market growth.

High Growth Earnings: MRO's loss is forecast to worsen by 0% next year.

Revenue vs Market: MRO's revenue (1.9% per year) is forecast to grow slower than the UK market (4.1% per year).

High Growth Revenue: MRO's revenue (1.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: MRO's Return on Equity is forecast to be low in 3 years time (9.3%).


Next Steps

Past Performance

How has Melrose Industries performed over the past 5 years?

-76.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: MRO is unprofitable, and losses have increased over the past 5 years at a rate of -76.2% per year.

Accelerating Growth: Unable to compare MRO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: MRO is unprofitable, making it difficult to compare its past year earnings growth to the Electrical industry (0.2%).


Return on Equity

High ROE: MRO has a negative Return on Equity (-3.79%), as it is currently unprofitable.


Return on Assets

ROA vs Industry: MRO is currently unprofitable, so its Return on Assets is negative.


Return on Capital Employed

ROCE Improving: MRO is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is Melrose Industries's financial position?


Financial Position Analysis

Short Term Liabilities: MRO's short term assets (£4.1B) exceeds its short term liabilities (£3.8B)

Long Term Liabilities: MRO's short term assets (4.1B) do not cover its long term liabilities (7.6B)


Debt to Equity History and Analysis

Debt Level: MRO's debt to equity ratio (50.4%) is considered high

Reducing Debt: MRO's debt to equity ratio has reduced from 57.7% to 50.4% over the past 5 years.

Debt Coverage: MRO's debt is not well covered by operating cash flow (15.9%).

Interest Coverage: Insufficient data to determine if MRO's interest payments on its debt are well covered by EBIT.


Balance Sheet

Inventory Level: MRO has a high level of physical assets or inventory.

Debt Coverage by Assets: MRO's debt is covered by short term assets (assets are 1.047930x debt).


Next Steps

Dividend

What is Melrose Industries's current dividend yield, its reliability and sustainability?

2.22%

Current Dividend Yield


Dividend Yield vs Market

company2.2%marketbottom25%2.0%markettop25%5.4%industryaverage2.2%forecastin3Years2.8%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: MRO's dividend (2.22%) is higher than the bottom 25% of dividend payers in the UK market (2%).

High Dividend: MRO's dividend (2.22%) is low compared to the top 25% of dividend payers in the UK market (5.44%).

Stable Dividend: MRO's dividend payments have been volatile in the past 10 years.

Growing Dividend: MRO's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: MRO is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: MRO's dividends in 3 years are forecast to be well covered by earnings (37.3% payout ratio).


Next Steps

Management

What is the CEO of Melrose Industries's salary, the management and board of directors tenure and is there insider trading?

7.4yrs

Average management tenure


CEO

Simon Peckham (56yo)

7.4yrs

Tenure

UK£1,049,000

Compensation

Mr. Simon A. Peckham has been Executive Director of GKN Holdings plc since April 19, 2018. He has been the Chief Executive Officer and Managing Director at Elster Group SE since August 24, 2012. He has bee ...


CEO Compensation Analysis

Compensation vs. Market: Simon's total compensation ($USD1.34M) is about average for companies of similar size in the UK market ($USD4.59M).

Compensation vs Earnings: Simon's compensation has been consistent with company performance over the past year.


Management Age and Tenure

7.4yrs

Average Tenure

53.5yo

Average Age

Experienced Management: MRO's management team is seasoned and experienced (7.4 years average tenure).


Board Age and Tenure

3.4yrs

Average Tenure

65yo

Average Age

Experienced Board: MRO's board of directors are considered experienced (3.4 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUK£6,49018 Mar 19
David Lis
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares3,500
Max PriceUK£1.85
BuyUK£6,49118 Mar 19
David Lis
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares3,500
Max PriceUK£1.85
BuyUK£465,66019 Dec 18
Justin Dowley
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares300,000
Max PriceUK£1.55
BuyUK£39,19719 Dec 18
David Lis
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares25,000
Max PriceUK£1.57
BuyUK£999,96419 Dec 18
David Roper
EntityIndividual
Role
Vice Chairman
Executive Vice Chairman
Shares643,602
Max PriceUK£1.55
BuyUK£16,54217 Oct 18
Justin Dowley
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares9,531
Max PriceUK£1.74

Ownership Breakdown


Management Team

  • Simon Peckham (56yo)

    CEO & Executive Director

    • Tenure: 7.4yrs
    • Compensation: UK£1.05m
  • Geoffrey Martin (51yo)

    Group Finance Director & Executive Director

    • Tenure: 14.3yrs
    • Compensation: UK£856.00k
  • James Miller (67yo)

    Executive Vice Chairman

    • Tenure: 0yrs
    • Compensation: UK£575.00k
  • David Roper (68yo)

    Executive Vice Chairman

    • Tenure: 7.4yrs
    • Compensation: UK£583.00k
  • Liam Butterworth (48yo)

    Chief Executive Officer of Automotive Division

    • Tenure: 0.9yrs
  • Joff Crawford (46yo)

    Company Secretary

    • Tenure: 0yrs

Board Members

  • Justin Dowley (63yo)

    Independent Chairman

    • Tenure: 0yrs
    • Compensation: UK£85.00k
  • Archie Kane (67yo)

    Independent Non-Executive Director

    • Tenure: 2.3yrs
    • Compensation: UK£69.00k
  • Simon Peckham (56yo)

    CEO & Executive Director

    • Tenure: 7.4yrs
    • Compensation: UK£1.05m
  • Liz Hewitt (63yo)

    Senior Independent Director

    • Tenure: 0.8yrs
    • Compensation: UK£80.00k
  • Geoffrey Martin (51yo)

    Group Finance Director & Executive Director

    • Tenure: 14.3yrs
    • Compensation: UK£856.00k
  • James Miller (67yo)

    Executive Vice Chairman

    • Tenure: 0yrs
    • Compensation: UK£575.00k
  • David Roper (68yo)

    Executive Vice Chairman

    • Tenure: 7.4yrs
    • Compensation: UK£583.00k
  • David Lis (69yo)

    Independent Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: UK£72.00k
  • Charlotte Twyning

    Independent Non-Executive Director

    • Tenure: 1yrs
    • Compensation: UK£17.00k
  • Funmi Adegoke

    Independent Non-Executive Director

    • Tenure: 0yrs

Company Information

Melrose Industries PLC's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Melrose Industries PLC
  • Ticker: MRO
  • Exchange: LSE
  • Founded: 2003
  • Industry: Heavy Electrical Equipment
  • Sector: Capital Goods
  • Market Cap: UK£10.081b
  • Shares outstanding: 4.86b
  • Website: https://www.melroseplc.net

Number of Employees


Location

  • Melrose Industries PLC
  • Leconfield House
  • Curzon Street
  • London
  • Greater London
  • W1J 5JA
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MROLSE (London Stock Exchange)YesNew Ordinary SharesGBGBPOct 2003
27MADB (Deutsche Boerse AG)YesNew Ordinary SharesDEEUROct 2003
MLSP.FOTCPK (Pink Sheets LLC)YesNew Ordinary SharesUSUSDOct 2003
MROLBATS-CHIXE (BATS 'Chi-X Europe')YesNew Ordinary SharesGBGBPOct 2003
MROS NBMV (Bolsa Mexicana de Valores)YesNew Ordinary SharesMXMXNOct 2003
MLSY.YOTCPK (Pink Sheets LLC)UNSPONSRED ADSUSUSDDec 2018

Biography

Melrose Industries PLC engages in the aerospace, automotive, powder metallurgy, air and security, and other industrial businesses. Its Aerospace segment supplies airframe and engine structures, landing gea ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/15 21:42
End of Day Share Price2019/10/15 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.