MRO Melrose Industries Plc

TIDMMRO

RNS Number : 0797M

Melrose Industries PLC

12 September 2023

12 September 2023

MELROSE INDUSTRIES PLC ("MELROSE" OR THE "COMPANY")

GTF PW1100G update

Melrose notes that RTX announced yesterday an update on their Pratt & Whitney GTF fleet arising from the previously disclosed rare condition in powder metal used to manufacture certain of their engine parts. This added further specificity, both for the market and for GTF programme partners, regarding the potential operational and financial impacts.

GKN Aerospace has a 4% programme share on the GTF PW1100G variant impacted by this issue. According to RTX's announcement, the full potential cash impact to Melrose spread over the period to 2026 could be in the range of c.GBP200 million, if it was assumed that this is all a programme cost.

Melrose's financial assumptions for all its RRSP programmes are conservative recognising that most of our work is done on the delivery of GKN parts which typically last the life of the engine, whilst appropriately allowing for risks to arise over the full programme duration. As a result, there is no change to our profit and balance sheet guidance, and the share buyback programme announced last week, starting in October this year, will proceed as planned whilst staying comfortably within previously stated leverage levels.

Melrose owns an exceptionally good Aerospace Engines business which can deliver over 30% operating margins post 2025, including contribution from a diverse portfolio of 19 RRSP engines contracts. This will be highlighted at the recently announced Engines Investor Event in October this year in Sweden, which will give further detail on the full quality of the business.

Simon Peckham, Chief Executive of Melrose Industries PLC, said:

"RTX indicated to us and the market yesterday that the GTF rare parts issue is within the scope they outlined previously and the cash impact is now assumed to be spread over a longer-term. We confirm our confidence in achieving the previous profit and balance sheet guidance and look forward to commencing our share buyback programme in October."

-ends-

Enquiries:

Investor Relations:

Chris Dyett

+44 (0) 7974 974 690

ir@melroseplc.net

Montfort Communications:

Nick Miles

+44 (0) 20 3514 0897

+44 (0) 7739 701 634

miles@montfort.london

Charlotte McMullen

+44 (0) 20 3514 0897

+44 (0) 7921 881 800

mcmullen@montfort.london

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MSCBIGDCUSBDGXB

(END) Dow Jones Newswires

September 12, 2023 02:00 ET (06:00 GMT)

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