Melrose stock soared on Thursday, despite the engineering business owner suffering heavy losses and scrapping its dividend as it indicated signs of a recovery.
The turnaround specialist, which owns British aerospace and automotive giant GKN following a hostile takeover in 2018, had a tough first half of 2020, posting an operating loss of £581 million as revenue tumbled 26% to £4.36 billion. It was forced to write down £179 million of assets due to Covid-19, including £133 million in aerospace. Adjusted operating profit plunged 90% to £56 million.
However, encouraging signs of a recovery in its Nortek Air Management business and in GKN’s automotive and powder metallurgy units sent the stock 13% higher to 114p.
There were no indications of such