Melrose Industries - GKN Aerospace

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]Are there investment opportunities in aerospace and defence?

Pent-up consumer demand for travel and a need to upgrade commercial fleets to the next generation of more fuel-efficient planes has helped boost sector sales.

The outbreak of conflict in Ukraine and the Middle East has also created an elevated threat environment, leading many nations to commit to boosting their defence spending for years to come.

Here’s the latest on three companies that look well-positioned to capture some of this increased demand.

This article isn’t personal advice. If you’re not sure an investment is right for you, seek advice. Investments can rise and fall in value, so you could get back less than you invest. Ratios shouldn’t be looked at on their own.
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Melrose – engines power the profit outlook

Melrose is a pure-play aerospace business, with exposure to both Civil and Defence customers. It has two main lines of business through its Engines and Structures divisions (think the body of a plane).

We’ve recently seen full-year revenue guidance get lowered slightly, now expected to come in between £3.3-3.4bn. But higher-than-expected margins in the Engines division, which have risen above 25%, more than offset this impact. Underlying operating profit guidance also got upgraded from £375-385mn to £400-410mn.

Demand’s been boosted by airlines looking to upgrade their ageing fleets after several years of pandemic-related underinvestment.

That’s created an order backlog to supply components for more than 12,000 Boeing and Airbus aircraft at the last count, stretching all the way out to 2029. Because of this, we expect revenue to grow at double-digit rates for at least the next couple of years.

Its Engines division is the lifeblood of the company. The group has multiple Revenue and Risk Sharing Partnerships (RRSPs), which typically involve around 15-30 years of investment while it develops and refines unique parts for engine makers. For the next roughly 30 years, we should see the risk profile lessen and the group generate a lot more cash.

Most of the RRSPs are now in this money-making phase. Margins are likely to remain high given the parts Melrose contributes typically last the life of the engine and need very limited maintenance.

Competition in the space is limited and the current demand dynamic is providing strong pricing power.
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https://www.hl.co.uk/news/articles/are-there-investment-oppo…

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Britische Regierung will Industrie mit Milliarden ankurbeln

- Britische Regierung investiert 4,5 Mrd Pfund in heimische Industrie
- Über 2 Mrd Pfund fließen in Autobranche, 975 Mio Pfund in Luft- und Raumfahrt
- Großbritannien will Vorreiter bei grünen Energien sein und Investoren anlocken

LONDON (dpa-AFX) - Mit mehreren Milliarden Pfund will die britische Regierung die heimische Industrie ankurbeln. Wirtschaftsministerin Kemi Badenoch kündigte in der Nacht zum Sonntag staatliche Investitionen in Höhe von 4,5 Milliarden Pfund (5,18 Mrd Euro) in strategisch wichtige Industrien an. Davon fließen mehr als zwei Milliarden Pfund in die Autobranche und 975 Millionen Pfund in die Luft- und Raumfahrt. Das Geld soll in die Entwicklung emissionsfreier Fahrzeuge ebenso fließen wie in energieeffiziente Flugzeugausrüstung, wie es in einer Mitteilung hieß. Großbritannien will sich als Vorreiter bei grünen Energien präsentieren und Investoren anlocken.
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https://www.wallstreet-online.de/nachricht/17579400-britisch…

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GKN Aerospace-owner Melrose lifts 2023 profit expectations

British aerospace supplier Melrose said on Thursday it expected 2023 profit to be 7% higher than its previous expectations, partly driven by stronger aftermarket demand and improved pricing.

The owner of GKN (LON:GKN) Aerospace, which counts Airbus and Boeing (NYSE:BA) as its top customers, said trading and margin performance during the four month ended Oct. 31 was better than its previous expectations.

Melrose, which spun off its auto and other businesses in April to become a pure-play aerospace supplier, now expects an adjusted core profit of 680 million pounds to 700 million pounds ($842.5-$867.2 million) for the year ending Dec. 31.

It also said that adjusted operating profit next year would be about 4% better than market expectations, given that demand would continue to be constrained by supply.
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https://www.investing.com/news/stock-market-news/gkn-aerospa…

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MELROSE INDUSTRIES PLC - Trading Update 16.11.2023 - Strong growth, upgrading profit, higher margins



https://www.melroseplc.net/media/3261/trading-update-16-nove…

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Daraus sollten sich dann indirekt auch positive Effekte für Melrose ergeben:

Airbus will Flugzeugproduktion 2024 deutlich steigern

https://www.aerointernational.de/aviation-nachrichten/airbus…

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Melrose climbs after expanding GE Aerospace partnership

Melrose Industries PLC (LSE:MRO, OTC:MLSPF)'s share price jumped 4.1% after the company announced its GKN Aerospace Engines business has signed a major new agreement with GE Aerospace, the global aerospace engines market leader.

The two firms have expanded their long-term partnership with a new agreement that expands the risk and revenue sharing partnership participation on the GEnx programme, the fastest-selling high-thrust engine.
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https://www.proactiveinvestors.co.uk/companies/news/1032149/…

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GKN Aerospace owner Melrose signs £4bn deal with GE aerospace

GKN Aerospace owner Melrose has signed a new $5bn (£4bn) deal with aircraft engine supplier GE Aerospace.

The new aftermarket services agreement will widen Melrose’s GKN Aerospace divisions’ current partnership with GE, surrounding its fastest selling high-thrust GEnx engines.

In a statement on the London stock exchange, the company said it anticipates GKN Aerospace sales reaching around $5bn over the 30 year life span of the GEnx engine.

The partnership will cover new technology insertions, aftermarket repair of high-volume engine structures, and production of fan cases for GE’s engines.
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https://www.msn.com/en-us/money/companies/gkn-aerospace-owne…

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General Electric hat seine Gewinnprognose für das Gesamtjahr angehoben. Grund dafür ist die starke Nachfrage nach Ersatzteilen und Dienstleistungen für Triebwerke..

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Das Luftfahrtgeschäft von GE, die Cash Cow des Unternehmens, profitierte von einer gestiegenen Nachfrage nach Aftermarket-Dienstleistungen. Ein starker Aufschwung im Luftverkehr veranlasst die Fluggesellschaften dazu, ihre Jets angesichts des Mangels an Verkehrsflugzeugen länger zu nutzen.

"Wir glauben, dass die zivile Luftfahrt eine der besten mehrjährigen Wachstumsgeschichten in der Branche bleibt, da die aufgestaute Nachfrage nach Flugzeugen die Produktion ankurbelt, während Engpässe in der Lieferkette nachlassen sollten", sagte Matthew Akers, Analyst bei Wells Fargo, letzte Woche in einer Mitteilung.

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https://www.airliners.de/nachfrageboom-general-electric-erho…

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GE raises 2023 profit forecast on aviation boom

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GE's aviation business, its cash cow, has been lifted by a surge in demand for aftermarket services as a strong rebound in air travel prompted airlines to use jets for longer against the backdrop of shortage of commercial planes.

"At GE Aerospace, we continue to experience rapid growth driven by robust demand and solid execution, largely in commercial engines and services," CEO Larry Culp said in a statement.

GE's aerospace unit, which makes engines for jets made by Boeing Co (BA.N) and Airbus (AIR.PA), posted double-digit growth in orders, revenue and profit from a year earlier. The unit's margin expanded by 130 basis points in the quarter from a year ago.

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https://www.reuters.com/business/aerospace-defense/ge-raises…

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Melrose Engines Investor Event - Day 2 presentation (18 October)

https://www.melroseplc.net/media/3232/day-2-engines-investor…