Melrose Half-year Financial Results

About this update from Melrose Industries Plc

[{"type":"text","content":"\n \n 31 July 2026 \n   \n MELROSE INDUSTRIES PLC \n   \n UNAUDITED RESULTS \n FOR THE SIX MONTHS ENDED 30 JUNE 2026 \n Continued momentum in the first half \n Melrose Industries PLC (\"Melrose\", the \"Company\" or the \"Group\"), a world-leading global aerospace and defence business, today announces its interim results for the six months ended 30 June 2026 (the \"Period\"). \n Group highlights 1    \n   \n \n \n \n \n ● \n \n \n Good first half performance with growth in revenue of 10%, adjusted operating profit 2 up 16% and adjusted operating margin 2 up 50bps at 18.5% (2025: 18.0%) \n \n \n \n \n ● \n \n \n Strong revenue growth of 19% in Engines driven by both OE and aftermarket, with Airframes revenue up 4% driven by Defence \n \n \n \n \n ● \n \n \n Free cash inflow 2 of £13 million, an improvement of £67 million; factoring balance £9 million lower at £387 million (31 December 2025: £396 million) \n \n \n \n \n ● \n \n \n Group leverage 2 at 1.8x, in line with the position at 31 December 2025 \n \n \n \n \n ● \n \n \n Our lean operating model, Brilliant Basics, is driving improvements in inventory management and manufacturing productivity \n \n \n \n \n ● \n \n \n Garden Grove facility in the US back to partial production following chemical tank incident at the end of May; working closely with relevant authorities and customers to safely resume full production \n \n \n \n \n ● \n \n \n Current £175 million share buyback programme paused pending clarification of financial impact of the Garden Grove incident, including from ongoing regulatory and legal processes   \n \n \n \n \n ● \n \n \n Increase in interim dividend per share to 2.7 pence (2025: 2.4 pence), growth of 13% \n \n \n \n \n ● \n \n \n Excluding the impact of Garden Grove, our guidance for the full year remains unchanged \n \n \n \n \n   \n   \n \n \n \n \n \n \n \n Adjusted 2 results \n \n \n Growth 1 \n \n \n Statutory results \n \n \n \n \n \n \n \n 2026 \n \n \n 2025 \n \n \n   \n \n \n 2026 \n \n \n 2025 \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n   \n \n \n £m \n \n \n £m \n \n \n \n \n Revenue \n \n \n 1,873 \n \n \n 1,720 \n \n \n 10% \n \n \n 1,873 \n \n \n 1,720 \n \n \n \n \n Operating profit \n \n \n 347 \n \n \n 310 \n \n \n 16% \n \n \n 154 \n \n \n 441 \n \n \n \n \n Operating margin % \n \n \n 18.5% \n \n \n 18.0% \n \n \n 50bps \n \n \n   \n \n \n \n \n \n \n \n Profit before tax \n \n \n 282 \n \n \n 248 \n \n \n 18% \n \n \n 89 \n \n \n 379 \n \n \n \n \n Diluted earnings per share (p) \n \n \n 17.7p \n \n \n 15.1p \n \n \n 22% \n \n \n 6.0p \n \n \n 22.2p \n \n \n \n \n Dividend per share (p) \n \n \n 2.7p \n \n \n 2.4p \n \n \n 13% \n \n \n 2.7p \n \n \n 2.4p \n \n \n \n \n Free cash flow 2 \n \n \n 13 \n \n \n (54) \n \n \n +£67m \n \n \n n/a \n \n \n n/a \n \n \n \n \n Net debt 2 \n \n \n 1,530 \n \n \n 1,407 \n \n \n   \n \n \n n/a \n \n \n n/a \n \n \n \n \n Leverage 2 \n \n \n 1.8x \n \n \n 1.8x \n \n \n   \n \n \n n/a \n \n \n n/a \n \n \n \n \n Net debt and leverage comparative information as at 31 December 2025. \n   \n Peter Dilnot, Chief Executive Officer of Melrose Industries PLC, today said: \n \"We delivered a good performance in the first half, building on the momentum from last year, with operating profit up 16% and a strong improvement in free cash flow. This was underpinned by good commercial and technology progress, combined with operational improvements through our Brilliant Basics lean operating model. \n   \n We are managing the situation at our Garden Grove transparencies site following the incident in May.  Partial production has since resumed, and we will continue to work closely with customers, regulators and other authorities to safely restore the site to full production in the second half.  \n   \n Our clear growth strategy is underpinned by attractive end markets, differentiated technology and established positions on the world's leading civil and defence aircraft.  We have positive momentum and are confident about delivering sustained increases in profit and cash flow in the years ahead.\"  \n   \n Financial highlights 1 \n   \n \n \n \n \n ● \n \n \n Revenue of £1,873 million, 10 % growth on the prior year \n \n \n \n \n ● \n \n \n Adjusted operating profit 2 up 16% to £347 million (2025: £310 million) with adjusted operating margin 2 up 50bps to 18.5% \n \n \n \n \n ● \n \n \n Statutory operating profit of £ 154 million (2025: £441 m illion) impacted by unrealised losses on foreign exchange derivative contracts \n \n \n \n \n ● \n \n \n Incident at Garden Grove facility in May reduced revenue by £16 million and adjusted operating profit 2 by £9 million \n \n \n \n \n ● \n \n \n Free cash flow 2 improved by £67 million with an inflow of £13 million (2025: outflow of £54 million); factoring balance £9 million lower than at the end of December 2025 \n \n \n \n \n ● \n \n \n Adjusted diluted EPS 2 of 17.7p compared to 15.1p in 2025 representing growth of 22%. Statutory diluted EPS of 6.0 p (2025: 22.2p ) \n \n \n \n \n ● \n \n \n Net debt 2 of £ 1,530 million, representing leverage 2 of 1 .8 x \n \n \n \n \n ● \n \n \n Interim dividend of 2 .7 pence per share, an increase of 13 % on prior year \n \n \n \n \n   \n Divisional highlights 1 \n   \n Engines \n   \n \n \n \n \n ● \n \n \n Revenue up 19% to £896 million with adjusted operating profit 2 up 21% to £303 million, with strong growth in OE and aftermarket of 23% and 15% respectively \n \n \n \n \n ● \n \n \n Adjusted operating margin 2 up 40bps at 33.8% \n \n \n \n \n ● \n \n \n Continued strong OEM order intake for new aircraft supporting our multi-year order backlog for engine components    \n \n \n \n \n ● \n \n \n Adjusted operating profit 2 included £206 million (2025: £182 million) of variable consideration from RRSP contracts \n \n \n \n \n ● \n \n \n Multi-year contracts signed for fan blade repairs with Rolls-Royce and Pratt & Whitney \n \n \n \n \n ● \n \n \n Ongoing investment in capacity and capability at our Trollhättan site in Sweden to support the ramp in new engines \n \n \n \n \n ● \n \n \n Expansion of North Charlestown facility to strengthen engine component manufacturing capabilities  \n \n \n \n \n ● \n \n \n Encouraging progress on additive fabrication with a number of development agreements including: Pratt & Whitney to explore the manufacture of F135 components; an order for GE Industrial Gas Turbine technology insertion; and Pratt & Whitney to perform engine component repairs \n \n \n \n \n   \n \n   \n   \n Airframes \n   \n \n \n \n \n \n \n \n \n ● \n \n \n Revenue growth of 4% to £977 million reflecting strong growth in Defence of 14% with Civil 1% lower \n \n \n \n \n ● \n \n \n A djusted operating profit 2 of £62 million was 1% lower than the comparative period with a reduction in adjusted operating margin 2 of 40bps to 6.3%, reflecting lower volumes at Garden Grove; adjusted operating margin 2 of 7.2% excluding Garden Grove impact \n \n \n \n \n ● \n \n \n Civil backlog underpinned by strong orders for new aircraft across Airbus and Boeing platforms, with Airbus orders up 80% \n \n \n \n \n ● \n \n \n Following the production transfers outlined at the full year results, output and productivity have improved significantly in the Netherlands  \n \n \n \n \n ● \n \n \n Strong Defence momentum with continued demand for our lightweight aerostructures and advanced manufacturing capabilities: \n o  Working closely with Engines to develop an uncrewed aerial vehicle demonstrator for the FMV in Sweden \n o  Continuing to support Anduril following the UK Ministry of Defence's decision to shortlist the company for the next phase of Project NYX for the British Army \n o  Design and delivery of flight-ready structural components for BAE Systems' Collaborative Combat Aircraft (CCA) prototype, Brontanax \n \n \n \n \n \n \n \n \n \n   \n Garden Grove   \n \n \n \n \n ● \n \n \n Financial impact in the first half was to reduce revenue and adjusted operating profit 2 by £16 million and £9 million respectively \n \n \n \n \n ● \n \n \n Excluding this impact, Group revenue and adjusted operating profit 2 grew by 11% and 19%, with margins 80 bps higher \n \n \n \n \n ● \n \n \n In addition, £13 million of exceptional costs were incurred in the first half relating to the initial incident response, recovery and associated advisory costs \n \n \n \n \n ● \n \n \n The incident resulted in free cash flow 2  being £7 million higher than expected, with exceptional cash costs more than offset by the unwind of working capital at the site \n \n \n \n \n ● \n \n \n We are working closely with our customers and the relevant authorities to confirm the timing of resumption of full production, with the site expected to produce at around 50% of its normal capacity until then, reducing monthly revenue, operating profit and cash by c.£6 million \n \n \n \n \n ● \n \n \n As well as the financial impact from operating at reduced capacity, we currently anticipate incurring additional exceptional costs of between £25 million and £30 million in the second half  \n \n \n \n \n ● \n \n \n The Group is cooperating with regulators and lawyers across a number of enquiries, investigations and legal cases. These cases are complex and at this point the outcomes are uncertain.  The Group is also assessing a potential compensation programme to reimburse local residents and businesses. Our associated insurance position is under review \n \n \n \n \n ● \n \n \n Consequently, we have taken the decision to pause the current £175 million share buyback programme pending clarification of the impact \n \n \n \n \n ● \n \n \n A further update will be provided on the total expected financial impacts for the full year, and potentially beyond, in due course \n \n \n \n \n   \n   \n Guidance for 2026 full year \n Excluding the impact of the Garden Grove incident, our guidance for the full year, which assumes an average exchange rate of 1 GBP = US$1.37, is unchanged: \n             \n \n \n \n \n ● \n \n \n Revenue between £3,750 million and £3,950 million \n \n \n \n \n ● \n \n \n Adjusted operating profit 2 of between £700 million and £750 million, reflecting an adjusted operating margin 2 of c.19% at the mid-point \n \n \n \n \n ● \n \n \n Variable consideration of between £340 million and £380 million \n \n \n \n \n ● \n \n \n Free cash flow 2 after interest and tax of £150 million to £200 million \n \n \n \n \n ● \n \n \n Factoring utilisation expected to increase in line with Group revenue growth, generating a net cash inflow of between £30 million and £50 million which is included within the free cash flow 2 guidance for the year \n \n \n \n \n   \n   \n Enquiries: \n Investor Relations: \n Mat Wootton:   +44 (0) 7483 961 233, [email protected] \n Media: \n Simon Sporborg, Tom Pigott \n Brunswick:       +44 (0) 207 404 5959, [email protected] \n Audience Webcast link \n https://connectstudio-portal.world-television.com/en/6a3a3ddbbb3ff965938ba972 \n Conference Call Details - 9.30am, Friday 31 July \n United Kingdom (Local): +44 20 3936 2999 \nUnited Kingdom (Toll-Free): +44 808 189 0158 Global Dial-In Numbers \nAccess Code: 874550 \n             \n Melrose Industries PLC \n Melrose is an industry-leading global aerospace and defence technology business, listed in the UK, with more than 30 manufacturing sites across 12 countries.  We are a 'Super-Tier 1' partner to all airframe and engine OEMs, with design-led solutions on-board 100,000 flights a day, across all of today's high-volume aircraft.  We operate through two market-leading divisions, Engines and Airframes, across both original equipment and the aftermarket, covering the civil and defence markets.  Every day we deliver flight-critical components including full engine systems and structures; major airframe components such as wings and empennages; and full aircraft electrical wiring systems.  We have an excellent track record of delivering value for both customers and shareholders and have set out an exciting growth plan ahead. \n   \n Notes \n 1.     Growth is calculated at constant currency against 2025 results \n 2.     Described in the glossary to the 2026 Interim Financial Statements and considered by the Board to be a key measure of performance \n   \n   \n   \n   \n   \n \n \n   \n CHIEF EXECUTIVE OFFICER'S REVIEW \n   \n INTRODUCTION \n   \n In the first half, we continued to execute our strategy resulting in further profitable growth and increased cash generation.  We operate in attractive civil and defence end markets underpinned by record order backlogs for new commercial aircraft and increases in defence spending.  Having repositioned Melrose as a design-led, Super-Tier 1 business with embedded technology in the world's leading aircraft, we are well placed to benefit from this structural demand.   \n   \n Adjusted operating profit grew by 16% driven by 10% top line growth and another strong performance in our Engines business.  We also delivered a significant improvement in free cash flow, £67 million higher than the comparative period, generating positive first half free cash flow of £13 million.  These results were delivered against the backdrop of ongoing challenges within the supply chain constraining OEM build rates.  We remain focused on supporting rate increases and strengthening supply chain resilience. \n   \n Our teams secured new business, further developed our differentiated technology and drove operational improvements through Brilliant Basics, our lean operating model.   The strength and resilience of our people has also played a critical role in managing the incident at our Garden Grove facility with focus, operational rigour and our safety-first culture. \n   \n Looking ahead, the most significant contributor to future value is profitably capturing industry growth through our established positions in OE production and the aftermarket.  We also continue to make good progress in attractive target opportunities including our proprietary additive fabrication technology and the development of uncrewed defence air vehicles.  In addition, we are well positioned for the longer term with partnerships working on the next generation of single aisle engines and airframes, sixth generation fighters and electric flight.  \n   \n FIRST HALF 2026 RESULTS \n   \n Group revenue rose 10% in the first half to £1,873 million. This was driven by strong Engines growth of 19%, from across all areas of its business.  Airframes revenue was 4% higher, reflecting strong Defence growth partially offset by Civil .  The impact of foreign currency translation, including a weakening of the US Dollar against Sterling, reduced revenue and adjusted operating profit by £28 million and £11 million respectively versus the comparative period. There was a 16% increase in adjusted operating profit to £347 million, with margins 50bps higher at 18.5%.  Positive free cash flow of £13 million represented an increase of £67 million.  Our net debt position was in line with our expectations at £1,530 million, representing a leverage ratio of 1.8x which is in line with the position at 31 December 2025. \n   \n We made further operational gains across the Group.  On safety our Total Incident Rate ('TIR') for the 12-month period ended 30 June 2026, was 25% lower than the prior corresponding period.  We also made progress on inventory which remains a key focus area with Days Inventory Outstanding ('DIO') reducing by 5% compared to June 2025.  These gains reflect the traction we are seeing with our lean operating model, Brilliant Basics, and a strong culture of continuous improvement across the Group. \n   \n GARDEN GROVE \n   \n At the end of May, we had a thermal incident involving one of three chemical tanks at our GKN Aerospace Garden Grove facility in the US, which resulted in the temporary closure of the site and evacuation of the local area.  \n   \n Garden Grove is one of two main GKN transparency facilities. The site is responsible for a significant proportion of the global supply of aerospace-grade acrylic used to manufacture transparencies for major defence and civil platforms, including the F-35 and passenger cabin windows on commercial aircraft.  Revenue generated by the site was £136 million in 2025.  \n   \n The processing of acrylic into finished product, which employs c.95% of employees at the site, has resumed.  Work continues with customers and relevant regulatory authorities to safely resume full production at the site.  Until then, the site is e xpected to produce at around 50% of its normal monthly run rate, resulting in a £6 million reduction in revenue, operating profit and cash flow per month.   In addition to the financial impact from processing lower volumes, we expect to incur additional exceptional costs of c.£25 million to £30 million in the second half.  \n   \n We will provide an update on the total expected impact for the full year and potentially beyond in due course, including from ongoing regulatory and legal processes.  The Group is also assessing a potential compensation programme to reimburse local residents and businesses.  Our associated insurance position is under review. \n   \n WELL-POSITIONED IN ATTRACTIVE GROWTH MARKETS \n   \n Melrose's revenue streams are broad-based , generating income from: Engines and Airframes; original equipment and aftermarket; and across both civil aerospace and defence markets.   \n   \n Within Civil, we have content on large, regional and business jets and hold embedded positions on all leading commercial narrowbody and widebody aircraft, with a stronger weighting towards Airbus versus Boeing.  In Engines, we lead the industry in the fabrication of advanced engine structures, cases and frames.  We are RRSP partners on 19 different engine families, six of which will generate 90% of the value of the RRSP portfolio.  In Airframes, we have strong embedded positions with over 70% of our content provided on a sole-sourced basis.  Within defence, we have positions on all the major global platforms, both fixed wing and rotorcraft, including the F-35, Gripen, C-130 and Eurofighter.  In the first half of 2026, civil aerospace and defence represented 71% and 29% of Group revenue respectively.  \n   \n Civil \n Demand for civil aircraft remained strong, with Airbus and Boeing reporting gross order intake of 886 and 445 respectively in the first half.  This represents an 80% increase for Airbus versus the first half of 2025.  Backlogs across narrowbody and widebody are now up to 9 years.  Given our embedded content on the leading narrowbody and widebody platforms, these backlogs will read through to our Airframes and Engines businesses.  T he dynamic of constrained build rates and record order backlogs continues to drive fleet utilisation, resulting in a growing Engines aftermarket through engine shop visits for mature engines. \n   \n The outbreak of a broader conflict between the US and Iran was a notable development for the civil aerospace market.  The conflict caused disruption to flight activity, particularly in the Middle East, and a material increase in the price of jet fuel as well as constraining its availability.  Global flight hours in the second quarter were 3% lower than the equivalent period and in June 2026, IATA reduced their Revenue Passenger Kilometres growth forecast for 2026 from 4.9% to 2.1%.  Jet fuel prices recovered following the ceasefire, but uncertainty remains. \n    \n The impact of the conflict on Melrose and the sector has been limited to date, reflecting the favourable end market dynamics including the tight supply of new aircraft and constrained engine maintenance capacity.  Any medium-term impact will depend on the duration and scope of the conflict. \n   \n Defence \n The defence market continues to be shaped by geopolitics, in particular the conflicts in Ukraine and the Middle East, and the need for Europe to bolster sovereign capability. The associated opportunities for Melrose provide a potential source of upside to our medium-term financial targets and we are well placed in our core markets.         \n   \n As an established UK defence manufacturer, we welcomed the UK Defence Investment Plan published in June.  Our UK capability not only supports the production of existing platforms such as the Typhoon, but also future platforms such as GCAP.  We are also investing to build uncrewed vehicles, with over £20 million already committed to increase advanced composites manufacturing at our facility in Cowes on the Isle of Wight.  \n   \n In the US, we are well placed to benefit from rising defence budgets and demand for our capabilities across both Airframes and Engines including: F-35 sustainment and readiness where we have substantial content; missiles and air defence systems which use our casings and canisters; and sixth generation combat aircraft and uncrewed/autonomous systems.          \n   \n We also have established positions across other NATO countries including Sweden, the Netherlands, Germany and Norway where spending is increasing and uncrewed defence aerial vehicle developments are moving at pace.  \n   \n EXECUTING OUR GROWTH STRATEGY \n   \n Melrose is a 'Super-Tier 1' partner with design-led solutions deeply embedded in our customers' aircraft and engines, often for the life of the programme. \n   \n Our growth strategy is based on three elements. First is profitably capturing the growth from our established positions across civil and defence platforms, as production ramps up and the aftermarket reads through. The second is expansion in attractive target opportunities such as commercialising our breakthrough proprietary additive fabrication technology and developing uncrewed defence air vehicles.  And third, we continue to invest and position for the longer-term with partnerships working on the next generation of aircraft and engines.  Good progress was made in all three areas during the first half. \n   \n Engines \n In Engines, revenue generated from our diversified RRSP portfolio grew strongly, particularly on the OE side. This reflects increased deliveries of our components on the newer engines where our RRSP shares are higher, notably: GTF, GEnx and XWB. As well as securing decades of future aftermarket returns and cash through these newer engines, we continue to generate healthy returns and cash flow from our other RRSPs including the CFM56 and V2500. \n   \n In our Engines parts repair business we also saw significant growth in the first half.  We secured a number of multi-year contracts including with Rolls-Royce and a follow-on contract to support the repair of fan blades on a dual-use engine, building further share of this high growth market.  We also secured multi-year agreements with Pratt & Whitney covering repair solutions for GTF engine components.  \n   \n We continued to advance our breakthrough proprietary additive fabrication technology, with a number of development orders signed and multiple requests from customers. This builds on our long-term partnerships with both Pratt & Whitney and GE Aerospace.  We signed a development contract with Pratt & Whitney to explore the use of our additive technology to manufacture components on the F135 engine.  We are also leveraging our knowledge and position in space and Industrial Gas Turbines to accelerate additive fabrication adoption. \n   \n Airframes \n In Civil (63% of Airframes revenue), we continued to support our OEM customers as they look to increase production and delivery rates of new aircraft, where the backlog remains high.  Linked to this, we continued our investment programme in the UK enhancing our machining and inspection capabilities to deliver increased build rates and productivity improvements in Filton.  \n   \n Our JV in China achieved important milestones including the first deliveries of new components on the C909 regional jet, part of the COMAC family alongside the C919 narrowbody and the C929 widebody.  We also started shipping glass windows from our China facility for the Asian aftermarket. \n   \n In Defence (37% of Airframes revenue), we have made good progress developing a clean sheet uncrewed aerial vehicle demonstrator for the FMV, combining our leading structures and propulsion technologies from Sweden, the Netherlands and the UK.  In May, we announced that we will play a central role in Anduril's team following the UK Ministry of Defence's decision to shortlist the company for the next phase of Project NYX for the British Army.   The strength of our technology is positioning us favourably on next generation programmes, including uncrewed and 6 th generation fighters particularly in Europe. \n   \n Operational excellence \n Our lean operating model, Brilliant Basics, is central to how we are driving operational performance and delivering profitable growth.  It is based on continuous improvement principles with three core elements: daily management systems; problem solving techniques and the delivery of breakthrough projects.  Brilliant Basics is gaining traction throughout GKN Aerospace and is having tangible impacts in areas such as: supplier management and supply chain resilience; productivity and yields; and inventory and working capital management. \n   \n We are also deploying Brilliant Basics in conjunction with our customers and suppliers.  An excellent example of this is the work we have done with GE at our composite site in Tallassee where we make GEnx fan cases.  Here, we ran a joint kaizen week with three events delivering improved visual work instructions and 3D inspection technology leading to a 90% improvement in inspection time and a roadmap for increased autoclave capacity.  This event will support increasing production from 5 to 10 fan cases per week.  \n   \n As well as driving tangible financial benefits, Brilliant Basics is also fostering greater collaboration and teamwork across the Group as learnings are shared across our global sites. \n   \n CAPITAL ALLOCATION \n   \n We have a clear capital allocation framework.  Our first priority is to invest in the business to drive organic growth through the civil and defence ramp and targeted expansion opportunities.  In Engines, the primary focus is investing in rate capability for OE products, repair growth and our unique additive fabrication technology.  In Airframes, we are investing in automation and capacity to support higher production rates, with much of our new opportunity funding coming from customers, particularly in defence.   \n   \n Our second priority is our commitment to maintaining a sustained increase in the ordinary dividend and finally, we will look to return excess capital to shareholders through share buybacks.  Alongside these priorities, we will maintain a strong balance sheet with a target leverage ratio of between 1.5x to 2.0x, with investment grade metrics being targeted over time. \n   \n The Board has declared an interim dividend for 2026 of 2.7 pence per share, up 13%, which will be paid on 25 September 2026 to shareholders on the register at the close of business on 14 August 2026 .   We have taken the decision to pause the current £175 million share buyback programme pending clarification of the impact of the Garden Grove incident, including from regulatory and legal processes.  By the end of June 2026, we had completed a total of £70 million of share buybacks in 2026 including £12 million of the current programme. \n   \n \n \n   \n GUIDANCE \n   \n Guidance for full year 2026 \n   \n Excluding the impact of the Garden Grove incident, our guidance for the full year, which assumes an average exchange rate of 1 GBP = US$1.37, is unchanged .  \n   \n   \n \n \n \n \n   \n \n \n Excluding Garden Grove impact \n \n \n \n \n   \n \n \n (million) \n \n \n \n \n Revenue: \n \n \n   \n \n \n \n \n Engines \n \n \n £1,700 - £1,800 \n \n \n \n \n Airframes \n \n \n £2,050 - £2,150 \n   \n \n \n \n \n Group \n \n \n £3,750 - £3,950 \n \n \n \n \n   \n \n \n   \n \n \n \n \n Adjusted operating profit: \n \n \n   \n \n \n \n \n Engines \n \n \n £565 - £595 \n \n \n \n \n Airframes \n \n \n £170 - £190 \n \n \n \n \n PLC costs \n \n \n (c.£35) \n   \n \n \n \n \n Group \n \n \n £700 - £750 \n \n \n \n \n   \n \n \n \n \n \n \n \n Free cash flow \n \n \n £150 - £ 200 \n \n \n \n \n \n \n \n \n \n \n \n \n   \n   \n Factoring utilisation is expected to increase in line with Group revenue growth, generating a net cash inflow of between £30 million and £50 million which is included within the free cash flow guidance for the year. \n   \n Garden Grove is expected to produce at around 50% of its normal capacity until full production is resumed, reducing monthly revenue, operating profit and cash by c.£6 million.  In addition, we currently anticipate incurring additional exceptional costs of between £25 million and £30 million in the second half.  \n   \n Medium-term guidance \n   \n We have set out medium-term targets to deliver significant growth in revenue, profit and cash flow underpinned by our clear growth strategy;  this includes the delivery of £600 million of free cash flow (after interest and tax) in 2029, driven by: \n   \n   \n \n \n \n \n ● \n \n \n Growth in operating profit reflecting the production ramp up, growing aftermarket and operational improvements \n \n \n \n \n ● \n \n \n Increase in cash generation from our extensive Engine RRSP portfolio \n \n \n \n \n ● \n \n \n GTF programmes turning cash positive in 2028 \n \n \n \n \n   \n The Group's factoring balance (£396 million as at 31 December 2025) is expected to grow in line with the annual growth rate in Group revenue, before any translational foreign exchange impacts. \n   \n \n \n   \n DIVISIONAL REVIEW \n   \n ENGINES \n \n \n \n \n   \n Adjusted results \n \n \n H1 2026 \n £m \n \n \n H1 2025 \n £m \n \n \n Growth \n \n \n \n \n Revenue \n \n \n 896 \n \n \n 781 \n \n \n 19% \n \n \n \n \n Operating profit \n \n \n 303 \n \n \n 261 \n \n \n 21% \n \n \n \n \n Operating profit margin \n \n \n 33.8% \n \n \n 33.4% \n \n \n 40bps \n \n \n \n \n   \n Our industry-leading Engines division is a trusted partner to all global engine manufacturers, with differentiated products helping power around 90% of the world's major aircraft. It has significant diversification, within civil, defence and adjacent (space and Industrial Gas Turbines) markets as well as across both original equipment (OE) and aftermarket.  Its technology leadership, especially in additive fabrication, has earned it a unique position on key next-generation engine development programmes.  Engines revenue is well balanced across four core business models: risk and revenue sharing partnerships (\"RRSPs\"); long-term commercial agreements; engine repairs; and governmental partnerships. \n   \n Engines made strong progress in the first half with growth across all four business areas.  This was against the backdrop of ongoing supply chain challenges, with a continuation of the constraints within forgings and castings, as well as shortages of rare earth metal powders which are predominantly used in our engine repair business.  \n   \n As a full lifecycle partner to the engine OEMs, we are at the heart of delivering the increased rate required to meet the demand for new aircraft where backlogs remain at record levels.  An example of how this demand feeds through to Engines is AirAsia's record order in May for 150 Airbus A220s, which is powered by the Pratt & Whitney PW1500G engine where we have a 4-7% RRSP share.  \n   \n In the first half, we saw significant OE volume increases for new engines where we have significant RRSP shares, reflecting the demand from our OEM partners as they ramp production.  This included the Pratt & Whitney GTF engines which power the A320neo, A220 and E2, and the GE GEnx which powers the Boeing 787.  Engines aftermarket also performed well, with growth in our RRSP portfolio and strong development in our repairs and governmental businesses.  \n   \n First half performance \n In the first half, Engines revenue grew by 19%, with OE up 23% and aftermarket up 15%, underpinned by engine OEM based demand on key programmes such as the GTF and GEnx. \n   \n In the aftermarket, we saw growth across all areas of the division.  Building on the momentum from the second half of 2025, legacy narrowbody (V2500 and CFM56) continued to perform well with a revenue increase of 27%.  Our engines repair business grew 27%, despite ongoing powder shortages, reflecting higher fan blade volumes, with growth across all our sites.  Revenue was up 29% in Governmental, driven by aftermarket support on the RM12 engine that powers the Gripen C/D.  Variable consideration of £206 million (2025: £182 million) was in line with our expectations, reflecting the ramp in OE deliveries for the GTF, XWB and GEnx engines.  The growth of the Engines portfolio translated into a 21% increase in operating profit, with margins 40bps ahead of the comparative period.   \n   \n Commercial \n We recently announced an expansion of our long-standing relationship with Pratt & Whitney with an agreement to include low-pressure compressor vanes for the PW1500G and PW1900G GTF engines, within the existing RRSP programme.  Demand for our additive capabilities continued to grow: we signed a development contract with Pratt & Whitney to manufacture F135 Fan Case Components using additive fabrication; a multi-year contract to perform repairs on GTF components where the process enables restoration of components that cannot be completed using conventional methods; and first serial production for GE Industrial Gas Turbines using powder bed technology.  \n   \n We also continued to invest in our foundry business acquired in 2025 which has strengthened our ability to produce superalloy castings in-house, thereby allowing us to combine traditional casting with additive manufacturing to improve supply-chain resilience. \n   \n Our high-quality repair solutions business secured further contracts from existing OEMs, including a new five-year contract with Rolls-Royce covering fan blade repairs for the RB211-535, Trent 700 and Trent 800 engine programmes at our expanded San Diego facility.  The site also expanded its capabilities, completing its first repair of a blisk, a highly engineered component where the disk and blades are manufactured as a single piece.   \n   \n In defence, we delivered our first upgraded RM12 engine to the Swedish Armed Forces as part of the RM12 Enhanced Performance programme.  The upgrades increase engine thrust, endurance and operating efficiency for the Gripen C/D, with the programme building on our long-standing role as type certificate holder and strategic partner to the Swedish Air Force.  Looking ahead, we are on track to take on the same role on the RM16 engine that powers the Gripen E at the end of the year and remain committed to support all Gripen systems in the Ukraine based on the recent government-to-government announcement. \n   \n Operations \n The deployment of our lean operating model, Brilliant Basics, continues to deliver benefits and efficiency savings.  Inventory management is a key focus area and in the first half, the division achieved a 9% reduction in DIO through improvements in product flow.  A key breakthrough initiative is the work we are doing to manage the performance of our suppliers including implementing tailored strategies for low volume suppliers and initiatives covering dual-sourcing and insourcing.  \n   \n Technology \n During the first half, we continued to advance a broad portfolio of differentiated technologies, focusing on small air vehicles, next-generation propulsion systems, advanced manufacturing and digital engineering.  Advanced manufacturing remains an important area of differentiation, with progress across composite structures, additive fabrication, repair technologies and industrial digitalisation. \n   \n We continued to partner with all major engine OEMs, using our engine level design capability to enhance the performance of the next generation of commercial and defence engines. Our increased focus on engine composites saw us successfully manufacture the first composite front frame demonstrator hardware, validating a novel lightweight structural concept for future engine applications. \n   \n We also continued to deliver against our additive fabrication technology roadmap.  We demonstrated the feasibility of additive repair solutions for high-pressure compressor components, supporting both future product development and more sustainable aircraft lifecycle management. The first large-scale additive nozzle extension demonstrator was also manufactured for launcher applications, and we achieved important milestones for Laser Powder Bed Fusion manufacture of ArianeGroup Prometheus launcher engine turbine rotors and manifolds. \n   \n Digital technologies continue to enhance our competitive advantage.  We are focused on tangible value creation from AI, for example implementing an AI-assisted non-conformance tool, enabling more efficient reuse of legacy quality and manufacturing data to accelerate problem resolution and organisational learning.  This supports continued improvements in productivity and engineering effectiveness. \n   \n Through these activities, we continue to strengthen our differentiated technology portfolio, maturing critical capabilities that support improved productivity, sustainability and performance across both current and future aerospace platforms. \n   \n OUTLOOK \n   \n Our Engines division is well placed for continued growth, margin expansion and increasing cash flow.  The division has an enviable combination of OEM‑level capability, proprietary technology positions, strategic partnerships with all major engine OEMs, and the most diverse RRSP portfolio in the industry.  This provides the foundation for significant value creation in the years ahead. \n   \n In 2026, we expect the division to deliver revenue of £1,700 to £1,800 million and adjusted operating profit of £565 to £595 million (using an exchange rate of 1 GBP = US$1.37). \n   \n \n \n   \n DIVISIONAL REVIEW \n   \n AIRFRAMES \n \n \n \n \n Adjusted results \n \n \n H1 2026 \n £m \n \n \n H1 2025 \n £m \n \n \n Growth \n \n \n \n \n Revenue \n \n \n 977 \n \n \n 939 \n \n \n 4% \n \n \n \n \n Operating profit \n \n \n 62 \n \n \n 63 \n \n \n -1% \n \n \n \n \n Operating profit margin \n \n \n 6.3% \n \n \n 6.7% \n \n \n -40bps \n \n \n \n \n   \n Our Airframes division is a Super-Tier 1 design-to-build partner on the world's highest volume civil and defence aircraft.  Through differentiated technology we are well positioned as partner of choice for next-generation and emerging platforms.  With strong underlying dynamics in both the civil and defence markets, our focus is on delivering production ramp-ups, driving margin expansion, improving quality of earnings and generating strong cash flow.   \n   \n The end market outlook remains positive, underpinned by strong demand for new aircraft driving record backlogs and the increase in global defence spending.  Divisional revenue derived from Civil and Defence platforms in the first half was 63% and 37% respectively.  \n   \n Gross orders for new commercial aircraft remained buoyant in the first half with a doubling of new orders on the A320neo family and a fourfold increase for the A220 compared with the first half in 2025.  Deliveries also grew in the Period, with Airbus up 15% and Boeing up 12% as the OEMs continue to try to meet required build rates against a backdrop of continued supply chain challenges.  In business jets, demand remains robust driving orderbook growth albeit deliveries were lower in the first half with supply issues impacting final assembly and completions. \n   \n In defence, spending by NATO continued to rise in in the first half with existing defence budgets underpinning demand for core military programmes.  The medium to long-term outlook is positive with NATO members having moved beyond their spending target of 2% of GDP to a pathway towards 3.5% by 2035, shifting defence spending from a short-term response to geopolitical events into a long-duration policy commitment.   Not only have commitments increased but there has also been a shift in priorities with a greater emphasis being placed on air power, missiles and autonomous and uncrewed systems. \n   \n First half performance \n Airframes revenue grew by 4% to £977 million, with strong growth in Defence of 14% driven by the F-35, C-130 and NH90 offset by Civil where revenue was slightly lower, down 1%. Within Civil, higher revenue in widebody (A350) was offset by narrowbody aircraft (A320) where revenue was lower, reflecting the utilisation of customer inventory.  Revenue from business jets was up 2%.  The impact of the incident at our Garden Grove facility was to reduce revenue and operating profit by £16 million and £9 million respectively versus our expectations in the first half.  Operating profit margin was 40bps lower at 6.3%, reflecting the impact of reduced throughput at Garden Grove, with operating profit of £62 million down 1% on the comparative period.  \n   \n In Defence, work has continued alongside the Engines division, to develop an uncrewed aerial demonstrator for the FMV in Sweden, with builds expected later this year and first flight tests in 2027.  This initiative brings together our leadership across both structures and propulsions technologies and paves the way for future similar opportunities.  We continue to support Anduril,  with the UK Ministry of Defence announcing that the company has been shortlisted for the next phase of Project NYX, a programme to develop an Autonomous Collaborative Platform for the British Army.  We also recently announced our participation in BAE Systems' Brontanax programme, where we are responsible for the engineering, manufacture, and full prototype integration of flight-ready wings, fins, and control surfaces for the UK's first Collaborative Combat Aircraft.  \n   \n In Civil, our Chinese business reached some important milestones in the first half.  The Langfang site recorded the significant achievement of 4,000 days without a lost time accident.  Our JV in Jingjiang made its first shipments of the Horizontal Tail Plane for the C909 regional jet.  We have also had success diversifying our sales beyond OE, increasing aftermarket revenue across EWIS, transparencies and wing structures. \n   \n Operations \n Brilliant Basics, our lean operating model, continued to drive operational improvements and greater efficiency across the division.  We have no higher priority than safety and in the first half the TIR  for the 12-month period ended 30 June 2026, was 48% lower than the corresponding period ended 30 June 2025.   We also delivered an improvement in the cost of poor quality which reduced by 12% versus the prior year, with productivity also up by three percentage points.   \n   \n Following the production transfers we outlined at the full year results, output and productivity have improved significantly at our site in the Netherlands, with further progress expected in the second half.   In the UK, execution of our investment programme to support the OEM ramp continued with a focus on enhancing our machining and inspection capabilities.  We also progressed key infrastructure improvements and introduced a pilot to support accelerated learning in robotics and AI. \n   \n The industrialisation of our Mexico facility advanced during the first half with the newly established EWIS capability successfully progressing through Airbus first article approvals, with the majority of harnesses now approved for manufacture in Mexico. \n   \n The work we have done on targeted supplier development activities, enhanced forecasting and dual-source initiatives is helping to strengthen resilience across critical supply chains.   We remain focused on improving supply chain stability, supporting rate increases and mitigating risks associated with global trade developments. \n   \n Technology \n Through differentiated technology and advanced manufacturing capabilities, we strengthened our position as a partner of choice for emerging urban air mobility and next-generation civil aerospace platforms.  \n   \n We have advanced our proprietary additive fabrication technologies, expanding our industrial applications towards airframe structural components.  In the first half, we completed our largest full scale prototype with component demonstrators being developed for defence customers in the UK and US.  In Defence, work on next generation transparencies continued including delivering  a flight-standard canopy and windscreen systems for a 6 th generation fighter, providing a transparency solution for flight test. \n   \n OUTLOOK \n   \n Airframes is a design-to-build partner on the world's highest volume platforms today and is a partner of choice for emerging and next generation aircraft.  It is well-positioned to take advantage of the ongoing civil ramp up and defence market growth, as well as the shift to more sustainable aviation over time.  With strong underlying dynamics in both markets, and our business improvement actions now substantially complete, we expect to deliver further profitable growth as production rates increase. \n   \n In 2026, excluding the impact from the Garden Grove incident, we expect the division to deliver revenue of £2,050 to £2,150 million and adjusted operating profit of £170 to £190 million (using an exchange rate of 1 GBP = US$1.37).  \n \n Peter Dilnot \n Chief Executive Officer \n 31 July 2026 \n   \n \n \n   \n CHIEF FINANCIAL OFFICER'S REVIEW \n   \n   \n MELROSE GROUP RESULTS \n   \n Statutory results: \n   \n The statutory IFRS results are shown on the face of the Income Statement and show revenue of £1,873 million (2025: £1,720 million), an operating profit of £154 million (2025: £441 million) and a profit before tax of £89 million (2025: £379 million).  The diluted earnings per share (\"EPS\"), calculated using the diluted weighted average number of shares during the Period of 1,252 million (2025: 1,283 million), were 6.0 pence (2025: 22.2 pence). \n   \n Adjusted results: \n   \n The adjusted results exclude certain items which are significant in size or volatility or by nature are non-trading or non-recurring, or any net change in fair value items booked on an acquisition.  It is the Group's accounting policy to exclude these items from the adjusted results, which are used as an Alternative Performance Measure (\"APM\") as described by the European Securities and Markets Authority (\"ESMA\").  APMs used by the Group are defined in the glossary to the Condensed Consolidated Interim Financial Statements. \n   \n The Melrose Board considers the adjusted results to be an important measure used to monitor how the Group is performing as they achieve consistency and comparability between reporting periods when all subsidiaries are held for the complete reporting period. \n   \n The adjusted results for the Period show revenue of £1,873 million (2025: £1,720 million), an operating profit of £347 million (2025: £310 million) and a profit before tax of £282 million (2025: £248 million).  Adjusted diluted EPS, calculated using the diluted weighted average number of shares in the Period of 1,252 million (2025: 1,283 million), were 17.7 pence (2025: 15.1 pence). \n   \n The following table shows the adjusted results for the Period split by reporting segment: \n \n \n \n \n   \n   \n \n \n Engines \n £m \n \n \n Airframes \n £m \n \n \n Corporate \n £m \n \n \n Total \n £m \n \n \n \n \n Revenue \n \n \n 896 \n \n \n 977 \n \n \n - \n \n \n 1,873 \n \n \n \n \n Operating profit/(loss) \n \n \n 303 \n \n \n 62 \n \n \n (18) \n \n \n 347 \n \n \n \n \n Operating margin \n \n \n 33.8% \n \n \n 6.3% \n \n \n n/a \n \n \n 18.5% \n \n \n \n \n   \n Revenue for Engines of £896 million (2025: £781 million) shows constant currency growth of 19% over 2025, with adjusted operating profit of £303 million (2025: £261 million) giving an operating margin of 33.8% (2025: 33.4%), an increase of 40 basis points. \n   \n Revenue for Airframes of £977 million (2025: £939 million) shows constant currency growth of 4% over 2025, with adjusted operating profit of £62 million (2025: £63 million) giving an operating margin of 6.3% (2025: 6.7%), a decrease of 40 basis points.  \n   \n The adjusted results for the Period were impacted by an incident that took place in May 2026 at our Garden Grove facility.   Excluding this impact, Group revenues would have been £16 million higher at £1,889 million (11% growth at constant currency) and adjusted operating profit would have been higher by £9 million at £356 million (19% growth at constant currency). A further £13 million of costs incurred associated with the Garden Grove incident were recognised as adjusting items. \n   \n The facility is included within the Airframes segment and, excluding the impact of the incident, Airframes revenue growth would have been 6% on a constant currency basis and operating margin would have been 7.2% (2025: 6.7%), an increase of 50 basis points. \n   \n Corporate costs of £18 million (2025: £14 million) included £13 million (2025: £13 million) of operating costs, £3 million (2025: £nil) of compensation for an executive Director connected to forfeited awards and £2 million (2025: £1 million) of costs in respect of the Performance Share Plan for certain senior managers in the Group. \n   \n Tables summarising the reconciliation of statutory results to adjusted results by reportable segment are shown in note 3 of the Condensed Consolidated Interim Financial Statements, with a Group table shown below. \n   \n   \n RECONCILIATION OF STATUTORY RESULTS TO ADJUSTED RESULTS \n   \n The following table reconciles the Group statutory operating profit to adjusted operating profit: \n \n \n \n \n \n \n \n 2026 \n £m \n \n \n       2025 \n £m \n \n \n \n \n Statutory operating profit \n \n \n 154 \n \n \n   441 \n \n \n \n \n Adjusting items: \n \n \n \n \n \n \n \n \n \n \n Amortisation of intangible assets acquired in business combinations \n \n \n 124 \n \n \n      127 \n \n \n \n \n Losses/(gains) in derivatives and associated financial assets and liabilities \n \n \n   \n 56 \n \n \n               (267) \n \n \n \n \n Garden Grove incident costs \n \n \n 13 \n \n \n           - \n \n \n \n \n Restructuring costs \n \n \n - \n \n \n      12 \n \n \n \n \n Net changes in fair value items \n \n \n - \n \n \n           (3) \n \n \n \n \n Adjustments to statutory operating profit \n \n \n 193 \n \n \n      (131) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Adjusted operating profit \n \n \n 347 \n \n \n 310 \n \n \n \n \n   \n Adjusting items to statutory operating profit include: \n   \n ·     The amortisation charge on intangible assets acquired in business combinations of £124 million (2025: £127 million), which is excluded from adjusted results due to its non-trading nature and to enable comparison with companies that grow organically.  However, where intangible assets are trading in nature, such as computer software and development costs, the amortisation is not excluded from adjusted results. \n ·     Movements in the fair value of derivative financial instruments (primarily forward foreign currency exchange contracts), where hedge accounting is not applied, along with foreign exchange movements on the associated financial assets and liabilities, entered into within the businesses to mitigate the potential volatility of future cash flows on long-term foreign currency customer and supplier contracts.  This totalled a charge of £ 56 million (2025: credit of £267 million) in the Period, and is shown as an adjusting item because of its volatility and size. \n   \n ·     Costs incurred associated with the Garden Grove incident totalling £13 million (2025: £nil) during the Period, relating to initial response, recovery and advisory costs. These are shown as adjusting items due to their size and non-trading nature. \n   \n ·     Costs in the prior period associated with significant restructuring projects of £12 million. These were shown as adjusting items due to their size and non-trading nature and included a charge of £10 million relating to the finalisation of significant restructuring projects across sites in the Engines and Airframes divisions in Europe and North America.  As at 30 June 2026, £8 million remains included in restructuring provisions from projects commenced in prior periods. \n   \n TAX \n   \n The statutory results for the Period show a tax charge of £ 14 million (2025: £94 million), which arises on a statutory profit before tax of £ 89 million (2025: £379 million). The effective tax rate on adjusted profit before tax for the Period was 21.3 % (2025: 21.8%). \n   \n SHARE BUYBACK PROGRAMMES AND NUMBER OF SHARES IN ISSUE \n   \n The Group completed its 18-month £250 million share buyback programme on 31 March 2026. During the Period, 9,416,570 ordinary shares were purchased at an average price per share of 595 pence and transferred to treasury.  \n   \n The Group also commenced its 12-month £175 million share buyback programme on 1 April 2026. During the Period, 2,375,743 ordinary shares were purchased at an average price per share of 500 pence and transferred to treasury, costing £12 million. This programme has been paused pending clarification of the financial impact associated with the incident at Garden Grove.       \n   \n The number of ordinary shares in issue, excluding treasury shares, has reduced by 1% from 1,258 million at 31 December 2025 to 1,246 million at 30 June 2026. \n   \n The weighted average number of shares used for basic earnings per share calculations in the Period was 1,250 million (2025: 1,279 million), and when including the number of shares expected to be issued from the Melrose equity-settled share plans, the weighted average number of shares used for diluted earnings per share was 1,252 million (2025: 1,283 million).  \n \n \n   \n CASH GENERATION AND MANAGEMENT \n   \n Free cash flow for the Period was an inflow of £13 million (2025: outflow of £54 million).  Excluding the impact of factoring, free cash flow was an inflow of £28 million (2025: outflow of £85 million), an increase of £113 million compared to the prior period.  An analysis of free cash flow is shown in the table below: \n   \n \n \n \n \n \n \n \n 2026 \n £m \n \n \n    2025 \n      £m \n \n \n \n \n Adjusted operating profit \n \n \n 347 \n \n \n 310 \n \n \n \n \n Depreciation and amortisation \n \n \n 70 \n \n \n 67 \n \n \n \n \n Variable consideration \n \n \n (206) \n \n \n (182) \n \n \n \n \n Positive non-cash impact from loss-making contracts \n \n \n (4) \n \n \n (5) \n \n \n \n \n Lease obligation payments \n \n \n (18) \n \n \n (17) \n \n \n \n \n Working capital movements: \n \n \n \n \n \n \n \n \n \n \n   Inventory \n \n \n (89) \n \n \n (85) \n \n \n \n \n   Receivables and payables (excluding factoring) \n \n \n 89 \n \n \n (1) \n \n \n \n \n Capital expenditure \n \n \n (52) \n \n \n (50) \n \n \n \n \n Restructuring \n \n \n (6) \n \n \n (17) \n \n \n \n \n Garden Grove incident \n \n \n (5) \n \n \n - \n \n \n \n \n GTF PMI payments \n \n \n (27) \n \n \n (37) \n \n \n \n \n Net interest and net tax paid \n \n \n (71) \n \n \n (64) \n \n \n \n \n Net other   \n \n \n - \n \n \n (4) \n \n \n \n \n Free cash flow pre-factoring \n \n \n 28 \n \n \n (85) \n \n \n \n \n Net cash flow from factoring arrangements \n \n \n (15) \n \n \n 31 \n \n \n \n \n Free cash flow \n \n \n 13 \n \n \n (54) \n \n \n \n \n   \n Variable consideration, excluding exchange adjustments, has increased in the Period to £ 206 million (2025: £182 million) in accordance with the development anticipated in our Risk and Revenue Sharing Partnership booklet.   Payments for obligations in connection with powder metal issues on certain Pratt & Whitney engines have reduced as expected to £ 27 million (2025: £37 million). \n    \n Working capital movements excluding variable consideration and the impact of factoring were neutral in the Period (2025: outflow of £86 million), being an outflow of £89 million (2025: £85 million) in inventory offset by an £89 million inflow (2025: outflow of £1 million) from receivables and payables. Inventory increased during the year due to a combination of supporting customer build rates, supply chain issues and normal seasonal factors.  Receivables and payables included a strong performance on customer receipts, which were meaningfully higher than anticipated at the end of June. \n   \n Capital expenditure in the Period was £ 52 million (2025: £50 million) and represented 1.0x (2025: 1.0x) depreciation of owned assets. \n   \n Restructuring spend in the Period reduced to £ 6 million (2025: £17 million) reflecting legacy cash costs incurred on projects announced in prior years. \n   \n Cash spend connected to the Garden Grove incident totalled £5 million during the Period (2025: £nil), relating to initial response, recovery and advisory costs. The full cash flow impact of the Garden Grove incident in the Period was a £7 million inflow due to a temporary unwind in site working capital offsetting both the cash spend noted above and the loss of site profit in the Period.  \n   \n   \n Net interest paid in the Period was £62 million (2025: £53 million), net tax payments were £ 9 million (2025: £11 million) and ongoing contributions to defined benefit pension schemes were £ 2 million (2025: £2 million). \n   \n The movement in net debt is summarised as follows: \n \n \n \n \n \n \n \n              £m \n \n \n \n \n Opening net debt \n \n \n (1,407) \n \n \n \n \n Free cash flow \n \n \n            13 \n \n \n \n \n Amounts paid to shareholders including associated costs \n \n \n   (130) \n \n \n \n \n Capital return from investments \n \n \n 13 \n \n \n \n \n FX and other non-cash movements \n \n \n (19) \n \n \n \n \n Net debt at 30 June 2026 at closing exchange rates \n \n \n (1,530) \n \n \n \n \n   \n Group net debt at 30 June 2026, translated at closing exchange rates (being US $1.33 and €1.16), was £ 1,530 million (31 December 2025: £1,407 million), after a free cash inflow of £13 million, described above. Movements in Group net debt also included dividends paid to shareholders of £60 million, £70 million spent buying back shares in the market, £13 million of capital returns from investments and net adverse foreign exchange and other non-cash movements of £19 million. \n   \n Group leverage at 30 June 2026 was 1.8x EBITDA (31 December 2025: 1.8x EBITDA) and interest cover was 7.2x (31 December 2025: 6.9x). \n   \n PROVISIONS \n Total provisions at 30 June 2026 were £130 million (31 December 2025: £147 million). \n   \n The following table details the movement in provisions in the Period: \n \n \n \n \n \n \n \n Total \n £m \n \n \n \n \n Provisions at 1 January 2026 \n \n \n       147 \n \n \n \n \n Net charge in the Period \n \n \n 3 \n \n \n \n \n Spend against provisions \n \n \n (17) \n \n \n \n \n Utilisation of loss-making contract provision \n \n \n (4) \n \n \n \n \n Exchange adjustments \n \n \n 1 \n \n \n \n \n Provisions at 30 June 2026 \n \n \n 130 \n \n \n \n \n   \n The net charge to the Income Statement in the Period was £3 million (2025: £21 million). During the Period, £4 million (2025: £5 million) was utilised against loss-making contract provisions and £17 million (2025: £26 million) of cash was spent against provisions with £6 million (2025: £17 million) relating to restructuring activities. \n   \n CONTINGENT LIABILITIES - GARDEN GROVE INCIDENT \n   \n The Group is cooperating with regulators (local, state and federal) and lawyers across multiple regulatory inquiries and investigations including more than thirty civil litigation actions.  These cases are complex and at this point the outcomes are uncertain.   As a consequence the Group is unable to reliably assess the likely outcome or quantify the financial impact as at the date of these financial statements, and as such no provision has been made. \n   \n   \n   \n PENSIONS AND POST-EMPLOYMENT OBLIGATIONS \n Melrose operates a number of defined benefit pension schemes and retiree medical plans across the Group, accounted for using IAS 19 Revised: \"Employee Benefits\". The values of the Group plans were updated at 30 June 2026 by independent actuaries to reflect the latest key assumptions and are summarised as follows: \n   \n \n \n \n \n   \n   \n \n \n   \n Assets \n £m \n \n \n Liabilities \n £m \n \n \n Accounting surplus/(deficit) \n £m \n \n \n \n \n GKN UK Group Pension Scheme - Number 1 \n \n \n 564 \n \n \n (546) \n \n \n 18 \n \n \n \n \n Other Group pension schemes \n \n \n - \n \n \n (29) \n \n \n (29) \n \n \n \n \n Total Group pension schemes \n \n \n 564 \n \n \n (575) \n \n \n (11) \n \n \n \n \n   \n At 30 June 2026, the total plan assets of Melrose Group's defined benefit pension plans were £ 564 million (31 December 2025: £579 million) and total plan liabilities were £575 million (31 December 2025: £606 million), a net deficit of £11 million (31 December 2025: £27 million). \n   \n The GKN UK Group Pension Scheme (Number 1) is the most significant pension plan in the Group, and is closed to new members and to the accrual of future benefits for current members. \n   \n At 30 June 2026, the GKN UK Group Pension Scheme (Number 1) had gross assets of £564 million (31 December 2025: £579 million), gross liabilities of £546 million (31 December 2025: £577 million), resulting in a net surplus of £18 million (31 December 2025: £2 million).  \n   \n A summary of the assumptions used are shown in note 10 to the Condensed Consolidated Interim Financial Statements. \n   \n FINANCIAL RISK MANAGEMENT \n   \n The principal financial risks and uncertainties faced by the Group include liquidity risk, finance cost risk, exchange rate risk, contract and warranty risk and commodity cost risk. The nature of these risks in relation to the Group are explained in detail on pages 29 to 30 of the 2025 Annual Report, a copy of which is available on the Company's website, www.melroseplc.net . \n   \n Further explanations and details of the strategic risk profile of the Group, which includes non-financial risk, are set out on pages 32 to 39 of the 2025 Annual Report. \n   \n \n \n   \n Exchange rates used in the Period \n   \n Exchange rates for currencies most relevant to the Group in the Period were: \n \n \n \n \n   \n \n \n \n \n \n   \n Average rate \n \n \n Closing rate \n \n \n \n \n US Dollar \n \n \n \n \n \n \n \n \n \n \n \n \n \n Six months to 30 June 2026 \n \n \n \n \n \n 1.34 \n \n \n 1.33 \n \n \n \n \n Twelve months to 31 December 2025 \n \n \n \n \n \n 1.32 \n \n \n 1.35 \n \n \n \n \n Six months to 30 June 2025 \n \n \n \n \n \n 1.30 \n \n \n 1.37 \n \n \n \n \n Euro \n \n \n \n \n \n \n \n \n \n \n \n \n \n Six months to 30 June 2026 \n \n \n \n \n \n 1.15 \n \n \n 1.16 \n \n \n \n \n Twelve months to 31 December 2025 \n \n \n \n \n \n 1.17 \n \n \n 1.15 \n \n \n \n \n Six months to 30 June 2025 \n \n \n \n \n \n 1.19 \n \n \n 1.17 \n \n \n \n \n   \n The Group policy on exchange rate risk is explained on page 30 of the 2025 Annual Report. \n   \n A 1 cent strengthening of the major currencies within the Group, if this were to happen in isolation against all other currencies, would have the following full year impact on the re-translation of adjusted operating profit into Sterling: \n   \n \n \n \n \n   \n \n \n USD \n \n \n EUR \n \n \n \n \n Increase in adjusted operating profit - £ million \n \n \n 5 \n \n \n 1 \n \n \n \n \n % impact on adjusted operating profit \n \n \n 0.7% \n \n \n 0.1% \n \n \n \n \n   \n In the Period, the Group incurred a 3% translational foreign exchange loss on adjusted operating profit compared to the prior period. \n   \n The impact from transactional foreign exchange exposures is not material in the short term due to hedge coverage being approximately 90%. \n   \n The Group utilises its multi-currency banking facility to maintain an appropriate mix of debt in US Dollars, Euros and Sterling. The hedge of having debt drawn in US Dollars and Euros protects against some of the Balance Sheet and banking covenant foreign exchange translation risk. A 1 cent strengthening in either the US Dollar or Euro would have the following impact on gross debt as at 30 June 2026: \n   \n \n \n \n \n   \n \n \n USD  \n \n \n EUR  \n \n \n \n \n Increase in gross debt - £ million \n \n \n 11 \n \n \n        2 \n \n \n \n \n Increase in gross debt - % \n \n \n 0.6% \n \n \n 0.1% \n \n \n \n \n   \n   \n Liquidity risk management \n   \n The Group's net debt position at 30 June 2026 was £1,530 million (31 December 2025: £1,407 million).  \n   \n As at 31 December 2025, the Group's bank facilities totalled US$1,680 million, €755 million and £350 million. Within these amounts, US$1,610 million, €400 million and £300 million were extended in the Period to April 2027 with the potential to be further extended to April 2028 at the Group's option. In addition, and during the Period, the £50 million facility maturing in January 2026 was extended to January 2027 and, for the €355 million facilities maturing in January 2027, the Group has arranged for the potential to extend the facilities for a further year at the Group's option. The US$70 million facility matured during the Period. \n   \n Therefore, the Group's bank facilities as at 30 June 2026 totalled US$1,610 million, €755 million and £350 million. \n   \n Details of the facilities and amounts borrowed as at 30 June 2026 are shown below. \n \n \n \n \n \n \n \n Local currency \n \n \n £m \n \n \n \n \n \n \n \n Size \n \n \n Drawn \n \n \n Headroom \n \n \n Headroom \n \n \n \n \n Term loan: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n USD \n \n \n 549 \n \n \n 549 \n \n \n - \n \n \n - \n \n \n \n \n EUR \n \n \n 415 \n \n \n 280 \n \n \n 135 \n \n \n 116 \n \n \n \n \n Revolving credit facility: \n \n \n \n \n \n \n \n \n \n \n USD \n \n \n 1,061 \n \n \n 982 \n \n \n 79 \n \n \n 60 \n \n \n \n \n GBP \n \n \n 350 \n \n \n 311 \n \n \n 39 \n \n \n 39 \n \n \n \n \n EUR \n \n \n 340 \n \n \n 28 \n \n \n 312 \n \n \n 269 \n \n \n \n \n Total (GBP) \n \n \n 2,216 \n \n \n 1,732 \n \n \n   \n \n \n 484 \n \n \n \n \n   \n In addition to the headroom of £484 million on committed facilities, there are a number of uncommitted overdraft, guarantee and borrowing facilities made available to the Group. As at 30 June 2026, there were cash and cash equivalents, net of overdrafts, totalling £199 million (31 December 2025: £154 million). \n   \n The committed bank funding has two financial covenants, being a net debt to adjusted EBITDA covenant (\"banking covenant leverage\") and an interest cover covenant, both of which are tested half-yearly at 30 June and 31 December. \n   \n Both covenants have comfortable headroom with the banking covenant leverage test level set at 3.5x, and as at 30 June 2026 it was 1.9x. The interest cover test is set at 4.0x, and as at 30 June 2026 the Group interest cover was 7.2x. \n   \n A limited number of Group trade receivables are subject to non-recourse factoring and customer supply chain finance arrangement.  The majority of these schemes are denominated in US Dollar and are translated into Sterling at the closing rate. As at 30 June 2026, these amounted to £387 million (31 December 2025: £396 million). No new schemes were added during the Period. \n   \n \n \n \n \n \n \n \n 2026 \n £m \n \n \n    2025 \n      £m \n \n \n \n \n Opening factoring utilisation \n \n \n 396 \n \n \n 338 \n \n \n \n \n FX movements \n \n \n 6 \n \n \n (29) \n \n \n \n \n Net cash (outflow)/inflow \n \n \n (15) \n \n \n 31 \n \n \n \n \n Factoring utilisation at 30 June \n \n \n 387 \n \n \n 340 \n \n \n \n \n   \n \n \n   \n Finance cost risk management \n   \n The Group uses financial derivatives to fix a portion of the interest cost on its committed bank facilities. The maximum weighted average rates, excluding the bank margin, the Group will pay on the fixed portions of its US Dollar, Euro and Sterling bank debt are 3.7%, 2.5% and 3.9% respectively.  \n   \n The margins on the bank facilities depend on the banking covenant leverage and were as follows: \n   \n \n \n \n \n \n \n \n 30 June 2026 \n \n \n 31 Dec 2025 \n \n \n \n \n Facility: \n \n \n Margin \n \n \n Range \n \n \n Margin \n \n \n Range \n \n \n \n \n Term Loan \n \n \n 1.40%-1.75% \n \n \n 0.90%-2.40% \n \n \n 1.40%-1.75% \n \n \n 0.90%-2.40% \n \n \n \n \n Revolving Credit Facilities \n \n \n 1.40%- 1.75% \n \n \n 1.00%-2.40% \n \n \n 1.40%- 1.75% \n \n \n 1.00%-2.40% \n \n \n \n \n   \n The Group's cost of drawn debt for the next 12 months is currently expected to be approximately 5.3%. \n   \n GOING CONCERN \n   \n As part of their consideration of going concern, the Directors have reviewed the Group's future cash forecasts and projections, which are based on both market and internal data and recent past experience. \n   \n The Directors recognise the challenges in the current economic environment, including challenges in supply chains and geopolitical risks. The Group is actively managing the associated impacts on trading through a sharp focus on pricing, productivity and costs. \n   \n The Group has modelled a severe but plausible downside case against these future cash forecasts and throughout this scenario the Group would not breach any financial covenants and would not require any additional sources of financing.  \n   \n The Directors have also given consideration to: (i) the potential impact of the Garden Grove incident and have incorporated its latest legal advice into the going concern assessment; and (ii) the impact of a pause in the current share buyback programme.   \n   \n The macroeconomic environment remains uncertain and volatile and the impacts of factors such as geopolitical conflict and challenges in supply chains could be more prolonged or severe than that which the Directors have considered in the Group's severe but plausible downside case. \n   \n Considering the Group's current committed bank facility headroom, its access to liquidity and the level of bank covenants in place with lending banks, the Directors consider it appropriate that the Group can manage its business risks successfully and adopt a going concern basis in preparing these Condensed Consolidated Interim Financial Statements. \n \n Ross McCluskey \n Chief Financial Officer \n 31 July 2026 \n \n \n CAUTIONARY STATEMENT \n This announcement contains forward-looking statements. These statements are made in good faith based on the information available up to the time of the approval of this announcement, and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information. Accordingly, readers are cautioned not to place undue reliance on any such forward-looking statements. Subject to compliance with applicable laws and regulations, the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this announcement. This announcement has been prepared solely to provide information to shareholders to assess the Company's strategies and the potential for those strategies to succeed, and neither the Company nor its directors accept any liability to any other person save as would arise under English law. \n   \n NO OFFER OF SECURITIES \n Nothing in this announcement constitutes an offer of securities for sale in the U.S. Securities may not be sold in the U.S. absent registration or an exemption from registration. \n   \n DIRECTORS' RESPONSIBILITY STATEMENT \n We, the directors of the Company, confirm to the best of our knowledge: \n 1.   the condensed financial statements have been prepared in accordance with IAS 34 \"Interim Financial Reporting\" as adopted by the UK; \n 2.   the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events and their impact during the first six months, and description of principal risks and uncertainties for the remaining six months of the financial year); and \n 3.   the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein). \n Details of the directors of the Company are available on our website at  https://www.melroseplc.net/governance/board-leadership/ . \n   \n By order of the Board \n                                                                         \n                                                                         \n   \n \n \n \n \n \n \n \n \n \n \n \n \n Peter Dilnot \n Chief Executive Officer           \n 31 July 2026 \n \n \n Ross McCluskey \n Chief Financial Officer \n 31 July 2026 \n \n \n \n \n   \n \n \n Independent review report to Melrose Industries PLC \n Report on the condensed consolidated interim financial statements \n Our conclusion \n We have reviewed Melrose Industries PLC's condensed consolidated interim financial statements (the \"interim financial statements\") in the Unaudited Results of Melrose Industries PLC for the 6 month period ended 30 June 2026 (the \"period\"). \n Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. \n The interim financial statements comprise: \n ●    the condensed consolidated balance sheet as at 30 June 2026; \n ● the condensed consolidated income statement and the condensed consolidated statement of comprehensive income for the period then ended; \n ●    the condensed consolidated statement of cash flows for the period then ended; \n ●    the condensed consolidated statement of changes in equity for the period then ended; and \n ●    the explanatory notes to the interim financial statements. \n   \n The interim financial statements included in the Unaudited Results of Melrose Industries PLC have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. \n Basis for conclusion \n We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Financial Reporting Council for use in the United Kingdom (\"ISRE (UK) 2410\"). A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. \n A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. \n We have read the other information contained in the Unaudited Results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements. \n Conclusions relating to going concern \n Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However, future events or conditions may cause the group to cease to continue as a going concern. \n \n \n   \n Responsibilities for the interim financial statements and the review \n   \n Our responsibilities and those of the directors \n The Unaudited Results, including the interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the Unaudited Results in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. In preparing the Unaudited Results, including the interim financial statements, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so. \n Our responsibility is to express a conclusion on the interim financial statements in the Unaudited Results based on our review. Our conclusion, including our Conclusions relating to going concern, is based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report. \n Use of this report \n This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. \n   \n  PricewaterhouseCoopers LLP \n Chartered Accountants \n London \n 31 July 2026 \n \n \n   \n Melrose Industries PLC                                                                            \n Condensed Consolidated Income Statement \n   \n \n \n \n \n   \n \n \n   \n   \n   \n   \n   \n   \n Notes \n \n \n                6 months \n ended \n 30 June \n 2026 \n Unaudited \n £m \n \n \n 6 months \n ended \n 30 June \n 2025 \n Unaudited \n £m \n \n \n Year ended \n 31 December \n 2025 \n Audited \n £m \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Revenue \n \n \n 3 \n \n \n 1,873  \n \n \n 1,720  \n \n \n 3,589  \n \n \n \n \n Cost of sales                                                                                                        \n \n \n \n \n \n (1,355) \n \n \n (1,266) \n \n \n (2,635) \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Gross profit \n \n \n \n \n \n 518  \n \n \n 454  \n \n \n 954  \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Operating expenses \n \n \n \n \n \n (364) \n \n \n (13) \n \n \n (354) \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Operating profit \n \n \n 3,4 \n \n \n 154  \n \n \n 441  \n \n \n 600  \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Finance costs \n \n \n \n \n \n (65) \n \n \n (62) \n \n \n (132) \n \n \n \n \n Finance income \n \n \n \n \n \n - \n \n \n -  \n \n \n -  \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Profit before tax \n \n \n \n \n \n 89  \n \n \n 379  \n \n \n 468  \n \n \n \n \n Tax \n \n \n 5 \n \n \n (14) \n \n \n (94) \n \n \n (98) \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Profit after tax for the period attributable to owners                          of the parent \n \n \n   \n 75  \n \n \n   \n 285  \n \n \n   \n 370  \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Earnings per share \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n    - Basic \n \n \n 6 \n \n \n 6.0p \n \n \n                    22.3p \n \n \n 29.1p \n \n \n \n \n    - Diluted \n \n \n 6 \n \n \n 6.0p \n \n \n 22.2p \n \n \n 29.0p \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Adjusted (1) results \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Adjusted operating profit \n \n \n 3,4  \n \n \n 347  \n \n \n      310 \n \n \n 647 \n \n \n \n \n Adjusted profit before tax \n \n \n 4 \n \n \n 282  \n \n \n                248 \n \n \n 515 \n \n \n \n \n Adjusted profit after tax \n \n \n 4 \n \n \n 222  \n \n \n                194 \n \n \n 410 \n \n \n \n \n Adjusted basic earnings per share \n \n \n 6 \n \n \n 17.8p \n \n \n 15.2p   \n \n \n 32.2p \n \n \n \n \n Adjusted diluted earnings per share \n \n \n 6 \n \n \n 17.7p \n \n \n  15.1p \n \n \n 32.1p \n \n \n \n \n   \n (1) Defined in the summary of material accounting policies (see note 2). \n   \n All results arise from continuing operations. \n \n \n   \n Melrose Industries PLC \n Condensed Consolidated Statement of Comprehensive Income \n                                     \n \n \n \n \n \n \n \n   \n   \n   \n   \n   \n   \n Notes \n \n \n 6 months \n ended \n30 June \n 2026 \n Unaudited \n £m \n \n \n 6 months \n ended \n30 June \n 2025 \n Unaudited \n £m \n \n \n Year ended \n 31 December \n 2025 \n Audited \n £m \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Profit after tax for the period \n \n \n   \n \n \n 75  \n \n \n                   285  \n \n \n 370  \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Items that will not be reclassified subsequently to the \n Income Statement: \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net remeasurement gain on retirement benefit obligations \n \n \n   \n \n \n 16  \n \n \n 6  \n \n \n 16  \n \n \n \n \n Fair value gain on investments in equity instruments \n \n \n   \n \n \n -  \n \n \n 4  \n \n \n -  \n \n \n \n \n Income tax (charge)/credit relating to items that will not be reclassified \n \n \n 5 \n \n \n (4) \n \n \n (1)   \n \n \n 3  \n \n \n \n \n                                                                  \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 12  \n \n \n 9  \n \n \n 19  \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Items that may be reclassified subsequently to the \n Income Statement: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Currency translation on investments, net of investment hedging \n \n \n \n \n \n 25   \n \n \n    (164) \n \n \n (125) \n \n \n \n \n Derivative gain/(loss) on hedge relationships \n \n \n \n \n \n 15  \n \n \n   (14) \n \n \n (12) \n \n \n \n \n Income tax (charge)/credit relating to items that may be reclassified \n \n \n 5 \n \n \n (4) \n \n \n 6        \n \n \n 6        \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 36  \n \n \n                 (172) \n \n \n (131) \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Other comprehensive income/(expense) for the period \n \n \n   \n \n \n 48  \n \n \n (163) \n \n \n (112) \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Total comprehensive income for the period attributable to owners of the parent \n \n \n   \n \n \n   \n 123  \n \n \n   \n                   122  \n \n \n   \n               258  \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n   \n \n \n   \n Melrose Industries PLC \n Condensed Consolidated Statement of Cash Flows \n   \n \n \n \n \n   \n \n \n   \n   \n   \n   \n   \n   \n Notes \n \n \n             6 months \n ended \n30 June \n 2026 \n Unaudited \n £m \n \n \n  6 months \n ended \n 30 June \n 2025 \n Unaudited \n £m \n \n \n Year ended \n 31 December 2025 \n Audited \n £m \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net cash from operating activities \n \n \n 11 \n \n \n 83  \n \n \n 8  \n \n \n 214  \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Investing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Purchase of property, plant and equipment \n \n \n \n \n \n (47) \n \n \n (46) \n \n \n (86) \n \n \n \n \n Proceeds from disposal of property, plant and equipment \n \n \n \n \n \n -  \n \n \n -  \n \n \n 29  \n \n \n \n \n Purchase of computer software and capitalised development costs \n \n \n \n \n \n (5) \n \n \n (4) \n \n \n (9) \n \n \n \n \n Acquisition of subsidiaries, net of cash acquired \n \n \n \n \n \n -  \n \n \n (5) \n \n \n (5) \n \n \n \n \n Disposal of businesses, net of cash disposed \n \n \n \n \n \n -  \n \n \n -  \n \n \n (20) \n \n \n \n \n Disposal of investments \n \n \n \n \n \n -  \n \n \n 9  \n \n \n 9  \n \n \n \n \n Capital return from investments \n \n \n \n \n \n 13  \n \n \n -  \n \n \n -  \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net cash used in investing activities \n \n \n (39) \n \n \n (46) \n \n \n (82) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Financing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Drawings on borrowing facilities \n \n \n \n \n \n 150  \n \n \n  220  \n \n \n  229  \n \n \n \n \n Costs of raising debt finance \n \n \n \n \n \n (3) \n \n \n (1) \n \n \n (1) \n \n \n \n \n Payment of principal under lease obligations \n \n \n \n \n \n (18) \n \n \n (17) \n \n \n (31) \n \n \n \n \n Purchase of own shares, including associated costs \n \n \n 7 \n \n \n (70) \n \n \n  (71) \n \n \n (173) \n \n \n \n \n Dividends paid to owners of the parent \n \n \n 7 \n \n \n (60) \n \n \n  (51) \n \n \n (82) \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net cash (used in)/from financing activities \n \n \n (1) \n \n \n 80  \n \n \n (58) \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net increase in cash and cash equivalents, net of bank overdrafts \n \n \n \n \n \n 43  \n \n \n  42  \n \n \n  74  \n \n \n \n \n Cash and cash equivalents, net of bank overdrafts at the beginning of the period \n \n \n \n \n \n   \n 154  \n \n \n   \n 80  \n \n \n   \n 80  \n \n \n \n \n Effect of foreign exchange rate changes \n \n \n \n \n \n 2  \n \n \n  (1) \n \n \n -  \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents, net of bank overdrafts at the end of the period                                                                                           \n \n \n   \n 11 \n \n \n   \n 199  \n \n \n        \n 121  \n \n \n        \n 154  \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n   \n   \n As at 30 June 2026, the Group had net debt of £1,530 million (31 December 2025: £1,407 million). A definition and reconciliation of the movement in net debt is shown in note 11. \n   \n \n \n   \n Melrose Industries PLC \n Condensed Consolidated Balance Sheet \n             \n \n \n \n \n   \n \n \n   \n   \n   \n   \n Notes \n \n \n 30 June \n 2026 \n Unaudited \n £m \n \n \n 30 June \n 2025 \n Unaudited \n £m \n \n \n 31 December \n    2025 \n Audited \n £m \n \n \n \n \n   \n Non-current assets \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Goodwill and other intangible assets \n \n \n \n \n \n 2,578  \n \n \n                    2,782  \n \n \n 2,690 \n \n \n \n \n Property, plant and equipment \n \n \n \n \n \n 867  \n \n \n 825  \n \n \n 864 \n \n \n \n \n Investments \n \n \n \n \n \n 44  \n \n \n 59  \n \n \n 56 \n \n \n \n \n Interests in equity accounted investments \n \n \n \n \n \n 5  \n \n \n 7  \n \n \n 6 \n \n \n \n \n Deferred tax assets \n \n \n \n \n \n 682  \n \n \n 612  \n \n \n 659 \n \n \n \n \n Derivative financial assets \n \n \n \n \n \n 53  \n \n \n 105  \n \n \n 84 \n \n \n \n \n Other receivables \n \n \n \n \n \n 1,742  \n \n \n 1,141  \n \n \n 1,526 \n \n \n \n \n Retirement benefit surplus \n \n \n 10 \n \n \n 18  \n \n \n -  \n \n \n 2 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 5,989  \n \n \n 5,531  \n \n \n 5,887 \n \n \n \n \n Current assets \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Inventories \n \n \n \n \n \n 638  \n \n \n 585  \n \n \n 542 \n \n \n \n \n Trade and other receivables \n \n \n \n \n \n 1,061  \n \n \n 1,047  \n \n \n 971 \n \n \n \n \n Derivative financial assets \n \n \n \n \n \n 19  \n \n \n 42  \n \n \n 29 \n \n \n \n \n Current tax assets \n \n \n \n \n \n -  \n \n \n 1  \n \n \n 1 \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n 200  \n \n \n 124  \n \n \n 166 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 1,918  \n \n \n 1,799  \n \n \n 1,709 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Total assets \n \n \n 3 \n \n \n 7,907  \n \n \n 7,330  \n \n \n 7,596 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Current liabilities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n \n \n \n 1,622  \n \n \n 1,505  \n \n \n 1,544 \n \n \n \n \n Interest-bearing loans and borrowings \n \n \n \n \n \n 51  \n \n \n 53  \n \n \n 60 \n \n \n \n \n Lease obligations \n \n \n 12 \n \n \n 29  \n \n \n 33  \n \n \n 31 \n \n \n \n \n Derivative financial liabilities \n \n \n \n \n \n 22  \n \n \n 19  \n \n \n 23 \n \n \n \n \n Current tax liabilities \n \n \n \n \n \n 19  \n \n \n 11  \n \n \n 15 \n \n \n \n \n Provisions \n \n \n 8 \n \n \n 46  \n \n \n 90  \n \n \n 64 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 1,789  \n \n \n 1,711  \n \n \n 1,737 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net current assets/(liabilities) \n \n \n \n \n \n 129  \n \n \n 88  \n \n \n (28) \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Other payables \n \n \n \n \n \n 551  \n \n \n 381  \n \n \n 533 \n \n \n \n \n Interest-bearing loans and borrowings \n \n \n \n \n \n 1,679  \n \n \n 1,475  \n \n \n 1,513 \n \n \n \n \n Lease obligations \n \n \n 12 \n \n \n 294  \n \n \n 236  \n \n \n 299 \n \n \n \n \n Derivative financial liabilities \n \n \n \n \n \n 18  \n \n \n 20  \n \n \n 11 \n \n \n \n \n Deferred tax liabilities \n \n \n \n \n \n 604  \n \n \n 528  \n \n \n 564 \n \n \n \n \n Retirement benefit obligations \n \n \n 10 \n \n \n 29  \n \n \n 52...

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