Elster acquisition gives Melrose a big boost in first half

29th Aug 2013 08:11

Engineering investment firm Melrose Industries saw revenues top the one billion-pound mark in the first half as results were boosted by Elster - the gas, electricity and water measurement business it acquired last year.The company, which runs a buy-improve-sell business strategy, said that revenue from continuing operations during the six months to June 30th totalled £1,022.2bn, more than double the £466.2m reported the year before, helped by a £569.2m contribution from Elster.All three sectors at Elster have improved profitability during the period, helping the company to hit its target of improving margins by three percentage points two years quicker than planned. Demand for Elster's products remains good, the company said, and the outlook for the business is "exciting".Group pre-tax profit also more than doubled, rising from £65.9m to £139.4m. The firm raised its interim dividend by 6% to 2.75p per share, up from 2.6p last year."Elster is fast proving to be another great acquisition with profit already up by over a third. We have achieved our original target for improving margin two years quicker than expected and more plans are underway," said Chairman Christopher Miller. "With the excellent progress achieved at Elster and substantial shareholder value being created from disposals, 2013 is looking like it could be a very successful year." Since the end of the period, the company sold its window and door hardware business Truth for £135m and motor and generator maker Marelli for £177m - these were both classes as discontinued businesses during the first half. The combined price of £312m multiples the original equity investment in these companies by four times, Melrose said.Melrose's share price was up over 3% at 293p in early trading on Thursday.BC