StockMarketWire.com - Engineering group Melrose Industries said it was trading at the top end of its expectations for 2020.

The relatively upbeat performance reflected a faster-than-expected recovery in automotive markets and a continued strong performance at its Nortek Air Management division.

The aerospace division, however, continued to suffer, with sales dripping 37% in the four months through October year-on-year.

'The benefits of significant restructuring and cost saving actions are starting to feed through and we continue to expect the business broadly to break even for the full year,' Melrose said.

In the automotive and powder metallurgy business, revenues had fallen by a more modest 3% and 7%, respectively.

'There has, in both cases, been an improving trend through the period, although it is fair to note that these stronger trends are boosted by the impact of the General Motors strike in the latter part of the same period last year,' the company said.

'Encouragingly, both businesses quickly returned to profitability with operating margins over 6% for the period in automotive and over 7% in powder metallurgy, reflecting the increasing benefits arising from the significant management actions taken.'

At Nortek Air Management, revenue had grown 13%, with a nearly 3 percentage points of operating margin improvement.

'Trading in the period has been encouraging in a number of our end markets and we are seeing the benefits of actions taken by management in our businesses' performance,' chairman Justin Dowley said.

'While short-term uncertainty remains, we are confident that our businesses can substantially improve their margins from today over the medium-term even without the need for full end market recovery.'




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