Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “With less than two months to go, Melrose remains on the right flight path to hit recently downgraded full-year targets, which call for underlying operating profits to rise around 18 per cent to £635mn at the midpoint.
“In a short trading update, the aerospace business revealed that its Engines division continued to power group performance, with revenue rising at double-digit rates over the four months to October 31.
“The outlook here is positive, with record backlogs underpinning Melrose’s production ramp-up.
“Continued air traffic growth and low retirement rates of planes are also supporting demand for its aftermarket services.
“The Structures division, which deals with building the body and wings of planes, saw revenue grow by 5 per cent, with momentum picking up since the half-year mark.
“Strong Defence demand and business improvements have helped support the group’s pricing power.
“But performance on the Civil side continues to be held back by customer supply chain issues.
“There’s not a great deal Melrose can do about this – it’s a challenge for the whole industry and the problem’s likely to persist for some time.”
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