Melrose Industries (MRO)
- Share Price:
- 494.30p
- Market Cap:
- £6,160m
- Change Today:
-
2.20p
- Sector:
- Manufacturing
Melrose shares slump on weak revenue guidance
By Frank Prenesti
Date: Friday 27 Feb 2026
LONDON (ShareCast) - (Sharecast News) - Shares in Melrose Industries tanked on Friday as investors were unimpressed with weaker-than-expected revenue guidance, despite a 21% jump in profits last year as global tensions and conflicts sparked a "significant" increase in military spending.
The company aerospace parts supplier said it anticipated revenue of £3.75bn - £3.95 billion versus estimates of £4bn. It also targeted 2026 earnings of £700m - 750m. Shares in the firm were down 10% as a result.
Adjusted pre-tax profit came for the year to December 31 came in at £515m from £438m a year earlier. Melrose also turned free cash flow positive to £125m - a turnaround of £199m - and unveiled a £175m share buyback.
On a reported basis, Melrose swung to a pre-tax profit £468m from a £106m loss a year earlier. Group revenue rose 8% to £3.59bn with 15% growth in its engines unit and 3% at its airframes division.
Governments are ramping up arms spending to meet the growing threat from an aggressive Russia as the UK pivots away from its European military and security commitments. In June, NATO members announced a commitment to increase their defence spending target to 3.5% of gross domestic product from 2%.
European states are mobilising €800bn in defence spending by 2029 while the European Union also set up a €150bn loan fund for joint procurement of military equipment. In the US President Donald Trump announced a proposal to hike the 2027 defence budget by 50% to $1.5trln.
Melrose chief executive Peter Dilnot said profit growth was driven by increased demand across its aircraft engines and defence operations and forecast "substantial" further increases in cash generation.
"We have positive momentum and are well-positioned to benefit from expected production ramp-ups and ongoing aftermarket expansion," he added.
Reporting by Frank Prenesti for Sharecast.com
MRO Market Data
| Currency | UK Pounds |
| Price | 494.30p |
| Change Today | 2.20p |
| 52 Week High | 681.80p |
| 52 Week Low | 448.20p |
| Volume | 4,928,118 |
| Shares Issued | 1,246.10m |
| Market Cap | £6,160m |
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