olivLaw · European equity research
Melrose Industries PLC MRO.L
United Kingdom · London Stock Exchange · ISIN GB00BNGDN821 · Vertical: Listed companies from United Kingdom
Melrose Industries PLC is a global tier one supplier to the aerospace industry, active in engines and airframe structures, with revenue and adjusted operating profit rising in fiscal 2025. The company is of interest now because it is reducing debt and continuing its share buyback programme while remaining tied to long-term engine contracts.
At the close of 05 Nov 2026, Melrose Industries PLC (MRO.L) stock was 4.66 GBP (−2.06% on the day), with market capitalisation 5.9 bn GBP, P/E 16.1 on diluted EPS of 0.29 GBP over the last 12 months, dividend yield 1.03%, beta 1.26, 52-week range 4.38–6.82 GBP.
Data as of · AI analysis dated · Source: ESEF annual reports and closing prices, computed by olivLaw.
Price history
Loading chart…
Technical reading
- RSI (14)
- 46.7
- neutral
- Bollinger (20, 2)
- 4.46 – 4.95
- in the lower half of the band · %B 0.39 · band width 10.4%
- SMA 50 / 200
- 4.76 / 5.07
- downtrend (price < SMA50 < SMA200)
- MACD (12, 26, 9)
- -0.01 / -0.01
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | EURO STOXX 50 | vs EURO STOXX 50 | Vertical median | |
|---|---|---|---|---|
| 1 month | +1.0% | −0.6% | +1.6 pp | — |
| 3 months | −2.5% | −4.2% | +1.7 pp | — |
| 6 months | −10.2% | +4.3% | −14.5 pp | — |
| Year to date | −20.9% | +7.5% | −28.4 pp | — |
| 1 year | −25.4% | +9.9% | −35.3 pp | +5.8% |
| 3 years | −8.2% | +49.8% | −58.0 pp | +26.3% |
| 5 years | +32.4% | +42.8% | −10.4 pp | — |
Price returns, dividends excluded.
Quarterly results
ESEF annual reports carry no quarters: the results are annual (below).
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 0 percentile of its own 1-quarter history (min 20.3, median 20.3, max 20.3; quarters with earnings only).
Fiscal years
| Fiscal year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | 3.4 bn | 3.5 bn | 3.6 bn |
| Revenue YoY | unavailable | +3.5% | +3.5% |
| Net income | -1.0 bn | -49.0 m | 370.0 m |
| Net income YoY | unavailable | unavailable | unavailable |
| Diluted EPS | -0.76 | -0.04 | 0.29 |
| Diluted EPS YoY | unavailable | unavailable | unavailable |
| net % | -30.4% | -1.4% | 10.3% |
| Free cash flow | -66.0 m | -229.0 m | 128.0 m |
Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 166.0 m GBP
- Financial debt
- 1.6 bn GBP
- Net debt
- 1.4 bn GBP
- Equity
- 2.8 bn GBP
- Total assets
- 7.6 bn GBP
- Debt / equity
- 0.56x
- Current ratio
- 0.98x
- ROE
- 13.0%
- ROA
- 4.9%
- FCF margin
- 3.6%
Financial statements (source on every figure)
Revenue and net income (GBP)
Margins
Income statement · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Revenue | 3.4 bn | 3.5 bn | 3.6 bn | esef· 24 Mar 2026verified |
| Cost of revenue | 2.7 bn | 2.6 bn | 2.6 bn | esef· 24 Mar 2026verified |
| Gross profit | 654.0 m | 822.0 m | 954.0 m | esef· 24 Mar 2026verified |
| Operating income | 57.0 m | -4.0 m | 600.0 m | esef· 24 Mar 2026verified |
| Interest expense | 79.0 m | 105.0 m | 132.0 m | esef· 24 Mar 2026verified |
| Pre-tax income | -8.0 m | -106.0 m | 468.0 m | esef· 24 Mar 2026verified |
| Income tax | -9.0 m | -57.0 m | 98.0 m | esef· 24 Mar 2026verified |
| Net income | -1.0 bn | -49.0 m | 370.0 m | esef· 24 Mar 2026verified |
| Diluted EPS | -0.76 | -0.04 | 0.29 | esef· 24 Mar 2026verified |
| Dividend per share | — | 0.04 | 0.05 | esef· 24 Mar 2026verified |
Balance sheet · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Cash | 58.0 m | 88.0 m | 166.0 m | esef· 24 Mar 2026verified |
| Receivables | 815.0 m | 949.0 m | 971.0 m | esef· 24 Mar 2026verified |
| Inventories | 513.0 m | 528.0 m | 542.0 m | esef· 24 Mar 2026verified |
| Current assets | 1.4 bn | 1.6 bn | 1.7 bn | esef· 24 Mar 2026verified |
| Property, plant & equipment, net | 777.0 m | 821.0 m | 864.0 m | esef· 24 Mar 2026verified |
| Total assets | 7.1 bn | 7.4 bn | 7.6 bn | esef· 24 Mar 2026verified |
| Accounts payable | 1.3 bn | 1.5 bn | 1.5 bn | esef· 24 Mar 2026verified |
| Short-term debt | 54.0 m | 8.0 m | 60.0 m | esef· 24 Mar 2026verified |
| Long-term debt | 576.0 m | 1.4 bn | 1.5 bn | esef· 24 Mar 2026verified |
| Current liabilities | 1.6 bn | 1.8 bn | 1.7 bn | esef· 24 Mar 2026verified |
| Total liabilities | 3.5 bn | 4.6 bn | 4.8 bn | esef· 24 Mar 2026verified |
| Equity | 3.6 bn | 2.8 bn | 2.8 bn | esef· 24 Mar 2026verified |
| Shares outstanding at year end | 1.3 bn | 1.3 bn | 1.3 bn | esef· 24 Mar 2026derived |
Cash flow · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Operating cash flow | 29.0 m | -121.0 m | 214.0 m | esef· 24 Mar 2026verified |
| Capex | 95.0 m | 108.0 m | 86.0 m | esef· 24 Mar 2026verified |
| Free cash flow | -66.0 m ≈ | -229.0 m ≈ | 128.0 m ≈ | esef· 24 Mar 2026derived |
| Investing cash flow | 721.0 m | -68.0 m | -82.0 m | esef· 24 Mar 2026verified |
| Financing cash flow | -966.0 m | 219.0 m | -58.0 m | esef· 24 Mar 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
- score weight coverage: 52.1% of at least 60%
A scoring methodology on indicators and valuation, not investment advice.
Closing price
05 Nov 2026Source: olivLaw, closing series
Market cap: 5.9 bn GBP
Key indicators
Coverage and freshness
Score by group
52% · Insufficient data
Estimated value range
unavailable — no valuation assumptions for the reporting currency
Valuation assumptions are editorial choices, not measured; beta is not measured.
Valuation methods
Assumptions (illustrative, editorial)
- Risk-free rate
- 6.5%
- Equity risk premium
- 6.0%
- Beta (default)
- 1.00
- Cost of equity
- 12.5%
- Terminal growth
- 3.0%
Factor scorecard
Insufficient data
Minimum-evidence gate: score weight coverage: 52.1% of at least 60%
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 11.3% | 46 (vs peers) | 20% |
| Net margin · Quality | 10.3% | 46 (vs peers) | 12% |
| FCF conversion · Quality | 34.6% | 7 (on a fixed band) | 12% |
| Revenue CAGR 3Y · Growth | unavailable | unavailable | — |
| EPS CAGR 3Y · Growth | unavailable | unavailable | — |
| Net debt / EBITDA · Balance sheet | unavailable | unavailable | — |
| Interest coverage · Balance sheet | 4.5x | 47 (on a fixed band) | 12% |
| Current ratio · Balance sheet | 1.0x | 15 (on a fixed band) | 8% |
| P/E (TTM) · Valuation | 16.1x | 50 (vs peers) | 20% |
| EV/EBITDA · Valuation | unavailable | unavailable | — |
| FCF yield · Valuation | 2.2% | 27 (on a fixed band) | 16% |
| Shareholder yield (distributions) · Returns | unavailable | unavailable | — |
| Payout ratio (FCF) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet34/100 · 2/3 factors with a value
- Growth· partialunavailable · 0/2 factors with a value
- Quality35/100 · 3/3 factors with a value
- Returns· partialunavailable · 0/2 factors with a value
- Valuation40/100 · 2/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
MELROSE INDUSTRIES PLC (MRO.L). Latest full fiscal year: 2025; data up to 2025-12-31.
Figures computed from the financial statements: revenue 3.6 bn GBP in 2025; YoY growth 3.5%; net margin 10.3%; ROE 13.0%.
The estimated value range is 2.08–3.37 GBP per share (median of 2 methods, agreement: low); assumptions are illustrative. Against the central value of 2.70 GBP, the price of 4.66 GBP leaves a potential of -42.0% (value / price − 1) and a margin of safety of -72.5% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
Insufficient data for a verdict (score weight coverage: 52.1% of at least 60%).
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
No signal among the computed factors. That is not an absence of risk: factors without data were not assessed, and business risks (margins, inventory, demand) are in the source-based analysis.
What contradicts it
- FCF conversion: 34.6%
- Current ratio: 1.0x
- FCF yield: 2.2%
- The price is above the estimated value range
- The valuation methods diverge
Not assessed (insufficient data or a ratio without meaning): Revenue CAGR 3Y, EPS CAGR 3Y, Net debt / EBITDA, EV/EBITDA, Shareholder yield (distributions), Payout ratio (FCF).
Versus the vertical median
Listed companies from United Kingdom · same country · compared with 39 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| BATS.LBritish American Tobacco P.L.C. | 104.3 bn | 13.5 | 16.5% | 30.3% | −1.0% | +7% / +88% |
| ABF.LAssociated British Foods PLC | 14.7 bn | 14.3 | 9.2% | 5.3% | −3.1% | −5% / −15% |
| MRO.LMelrose Industries PLC | 5.9 bn | 16.1 | 13.0% | 10.3% | +3.5% | −22% / −10% |
| 0EV1.LCarnival PLC | 5.5 bn | 4.1 | 46.7% | 13.4% | +6.4% | unavailable / unavailable |
| BAB.LBabcock International Group PLC | 5.1 bn | 24.7 | 34.7% | 4.1% | +7.2% | −10% / +158% |
| AUTO.LAutotrader Group PLC | 4.8 bn | 16.4 | 60.2% | 47.1% | +3.9% | −13% / −23% |
| BBY.LBalfour Beatty PLC | 4.2 bn | 16.3 | 23.2% | 2.8% | +15.2% | +20% / +160% |
| ABDN.LAberdeen Group PLC | 4.1 bn | 10.8 | 8.0% | 28.9% | −2.1% | +11% / +41% |
| BKG.LThe Berkeley Group Holdings PLC | 3.6 bn | 11.3 | 8.8% | 13.4% | −4.2% | −0% / −22% |
| BME.LB&M European Value Retail PLC | 2.9 bn | 17.4 | 21.2% | 2.8% | +3.7% | +68% / −51% |
| AJB.LAj Bell PLC | 2.4 bn | 22.8 | 49.9% | 33.1% | +18.0% | +8% / +128% |
| ASHM.LAshmore Group PLC | 1.4 bn | 13.9 | 13.1% | 71.6% | −0.1% | +28% / +18% |
| BCG.LBaltic Classifieds Group PLC | 1.2 bn | 23.2 | 15.8% | 57.6% | +6.9% | −99% / −99% |
| APN.LApplied Nutrition PLC | 763.6 m | 36.2 | 41.2% | 19.7% | +24.2% | +71% / unavailable |
| BAG.LA.G. Barr P.L.C. | 671.9 m | 14.4 | 14.4% | 10.8% | +4.0% | −7% / +26% |
| ASC.LAsos PLC | 494.5 m | — | -81.3% | -12.0% | −14.7% | +71% / +8% |
| ALFA.LAlfa Financial Software Holdings PLC | 486.8 m | 16.3 | 61.5% | 23.8% | +15.3% | −28% / +10% |
| AML.LAston Martin Lagonda Global Holdings PLC | 344.3 m | — | -93.4% | -39.2% | −20.6% | −45% / −85% |
| APTD.LAptitude Software Group PLC | 111.3 m | 28.5 | 7.2% | 6.2% | −7.3% | −30% / −23% |
| AMGO.LAmigo Holdings PLC | 9.9 m | — | — | — | −81.9% | +325% / +844% |
| ASBE.LAssociated British Engineering PLC | 605.3 k | — | -19.1% | — | unavailable | unavailable / unavailable |
| AMIF.LAmicorp Fs (uk) PLC | 221.6 k | 0.1 | 27.5% | 9.1% | +8.1% | unavailable / unavailable |
| AAF.LAirtel Africa PLC | — | — | 24.1% | 10.6% | +29.5% | −7% / +164% |
| AAL.LAnglo American PLC | — | — | -19.3% | -20.2% | +4.5% | +30% / +76% |
| ACG.LAcg Metals Limited | — | — | -80.3% | -32.0% | +134.8% | +60% / +63% |
1- and 3-year price returns: for MRO.L from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (GBP)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 2.73 Total return -40% · Per year -40% | 4.83 Total return 5% · Per year 5% | 7.28 Total return 58% · Per year 58% |
| 3 years | 2.60 Total return -42% · Per year -17% | 5.18 Total return 15% · Per year 5% | 8.57 Total return 88% · Per year 24% |
| 5 years | 2.47 Total return -43% · Per year -11% | 5.54 Total return 25% · Per year 5% | 10.09 Total return 124% · Per year 18% |
- Exit P/E± 1.29
- Net margin± 0.91
- Annual revenue growth± 0.75
- Annual dilution± 0.08
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
In brief
Melrose Industries PLC is a global tier one supplier to the aerospace industry, active in engines and airframe structures, with revenue and adjusted operating profit rising in fiscal 2025 1. The company is of interest now because it is reducing debt and continuing its share buyback programme while remaining tied to long-term engine contracts 1.
SWOT
Strengths
- The company holds a tier one position across two segments and a portfolio of long-term contracts with engine manufacturers.
- Leverage indicators sit below bank covenant thresholds, giving financial flexibility.
- Revenue is spread across several regions, with a substantial share from North America.
Weaknesses
- Adjusted operating profit in the Airframes segment is modest relative to its revenue, and restructuring has been costly.
- Net debt is substantial and implies significant financing costs.
- Exposure to several currencies introduces volatility into profit and equity.
Opportunities
- Growth in RRSP revenue could support long-term demand for maintenance services.
- Completing restructurings could reduce exceptional costs and improve margins.
- The share buyback programme shows a commitment to returning capital to shareholders.
Threats
- A decline in aircraft production could reduce revenue from components and aftermarket work.
- Currency fluctuations could affect operating profit and the value of assets.
- Rising interest rates could increase financing costs on floating-rate debt.
Risks
- Dependence on engine programmeshigh
Significant revenue depends on a few engine programmes, and delays or changes to them could affect cash flows.
- Currency exposuremedium
Movements in the dollar and euro against sterling could change reported operating profit and equity.
- Supplier finance programmesmedium
If the group exited these arrangements, the impact on cash flow could be significant, according to the sources.
- Indebtedness and financing costsmedium
High net debt and floating rates could raise financing costs if market conditions worsen.
- Restructuring costslow
Restructurings have generated substantial costs in the past, and a recurrence of similar charges could affect profit.
Investment thesis
What would need to be true (bull case)
- Revenue from long-term programmes has grown, which could support stable cash flows over a long period.
- Leverage indicators sit below covenant thresholds, which could leave room for investment and share buybacks.
- Completing restructurings could lead to better operating margins in the years ahead.
What would break the thesis
- Airframes profit remains modest, and if aircraft production falls, revenue could be hit.
- Net debt is high, and if interest rates rise, financing costs could reduce profit.
- Currency movements could significantly change results reported in sterling.
What to watch
- Completion of the 250 mn GBP share buyback programmeQ1 2026
- Development of RRSP revenue on engine programmes2026
- Trend in Airframes margin after restructurings2026
- Net debt and net debt to adjusted EBITDA at each covenant test30 June 2026
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
The business
Melrose Industries PLC is a global tier one supplier in the aerospace industry, organised into two reportable segments, Engines and Airframes, plus a corporate cost centre 1. The Engines segment offers structural engineered components, parts repair and commercial and aftermarket contracts, while Airframes supplies civil and defence structures, including lightweight composite and metallic structures and electrical distribution systems 1. In fiscal 2025 revenue was 3589 mn GBP and adjusted operating profit was 647 mn GBP 1.
The company works with long-term contracts, such as risk and revenue sharing partnerships (RRSP) on engines, in which partners share revenue from maintenance, repair and overhaul services provided by engine manufacturers 1. Revenue is recognised partly at a point in time and partly over time, and these contracts run for up to 30 years 1. This ties cash flows and contracted amounts closely to customer programmes.
At 31 December 2025 net debt was 1407 mn GBP, and the net debt to adjusted EBITDA ratio of 1.9x sat well below the 3.5x covenant level 1. The company also ran a 250 mn GBP share buyback programme, expected to complete by the end of March 2026 1.
Segments
Engines
The Engines segment is an industry leading global tier one supplier to the aerospace engines market, with structural engineered components, parts repair and commercial and aftermarket contracts 1. In 2025 it generated revenue of 1632 mn GBP and adjusted operating profit of 520 mn GBP, the largest contributor to group profit 1.
Airframes
The Airframes segment supplies civil and defence airframes, including lightweight composite and metallic structures and electrical distribution systems 1. In 2025 it had revenue of 1957 mn GBP and adjusted operating profit of 156 mn GBP, after completing significant restructuring projects in Europe 1.
Market context
Most group revenue comes from North America, at 2349 mn GBP in 2025, followed by Europe, while the UK contributed 574 mn GBP 1. The company operates in the global aerospace market, where long-term contracts and exposure to engine programmes shape demand 1.
Currency exposure is significant, as the company reports in sterling but has important operations in US dollars and euros 1. Companies in this market depend on the pace of aircraft production and customers' maintenance programmes, which can vary from year to year 1.
Trends
- Growth in long-term programme revenuetailwind
Revenue recognised from RRSP contracts rose to 996 mn GBP in 2025 from 859 mn GBP in 2024, suggesting that long-term programmes are contributing more 1.
- Currency exposuremixed
Movements in the US dollar and euro against sterling could change adjusted operating profit, as the company has significant sensitivities to these currencies 1.
- Completed restructuringstailwind
Significant restructuring projects in Europe have been completed, with cumulative costs reaching 313 mn GBP, which could reduce exceptional charges in coming years 1.
- Financing costsheadwind
Higher interest rates could increase financing costs, since part of the debt carries floating rates, although the company uses derivatives to fix part of this exposure 1.
Competitive position
The supplied sources do not explicitly name the company's competitors, so they cannot be listed from the documents reviewed 1. The company presents itself as a global tier one supplier, which points to competition with other large aerospace component and structure suppliers 1.
Its competitive position appears to depend on long-term contracts with engine manufacturers and on the ability to deliver complex civil and defence structures 1. If these contractual relationships change, the company's relative position could be affected.
- Other tier one aerospace suppliers
The sources do not name specific competitors, but the company operates as a tier one supplier, a segment with several large players.
- Aerospace engine manufacturers
Engine manufacturers are both customers and partners through RRSP contracts, which makes the relationship two-sided.
- Aircraft electrical systems suppliers
The Airframes segment competes in electrical distribution, where several specialist suppliers operate.
- Composite and metallic structure suppliers
Lightweight composite and metallic structures compete with other aerospace structure producers.
News & filings
In the press
- Banks take different views on Melrose after Garden Grove claims programmeYahoo Finance — News · 26 Aug 2026 · EN
- Melrose shares climb on Garden Grove plant reopening timelineYahoo Finance — News · 25 Aug 2026 · EN
Annual reports (ESEF)
- Annual report 202524 Mar 2026
- Annual report 202415 Apr 2025
Sources
- [1] Annual report, fiscal year ended 2025-12-31 (ESEF) · SEC / Melrose Industries PLC · 31 Dec 2025
Figures computed by olivLaw from ESEF annual reports and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.