Melrose Industries’ track record is attractive for investors

As Melrose Industries reports half year results Graham Spooner, investment research analyst at The Share Centre, explains what it means for investors.

“Melrose Industries reported an 8.6% increase in profits before tax for the period, despite the strong pound continuing to dampen figures. The Elster business boosted results, with profits in the group up 50% since its purchase in 2012.

“The Elster business continues to perform strongly and there are still opportunities for further growth. With the acquisition exceeding expectations and having the potential to be the most successful yet, it may signal investors to start thinking when the company may sell.

“Investors’ focus may also move to what acquisition the company will make next, however management has confirmed that with asset prices rising they may have to be patient.

“We continue to recommend Melrose Industries as a ‘buy’ for a balanced portfolio. Management has an excellent track record on improving businesses and the company offers investors the chance of further growth and cash returns.”