Melrose eyeing acquisitions as profits surge after Elster deal

5th Mar 2014 07:11

- Headline profits almost double to 226m pounds- Dividend lifted by two per cent- Melrose 'ready and keen to buy'Industrial conglomerate Melrose saw profits almost double in 2013, helped by a full year's contribution from Elster, the gas, electricity and water metering company acquired the previous year.The group, which also streamlined other operations during the year through the disposal of five businesses from the FKI acquisition in 2008, said it is now "ready and keen to buy again".Headline profit before tax totalled £226.1m in 2013, up from £117.9m in 2012. Continuing group revenues surged to £1.73bn, from £1.05bn previously. The company said that the integration of Elster has been better than expected and its performance so far has been "very encouraging". Meanwhile, the remaining FKI businesses of Bridon and Brush also put in a "good performance" despite subdued order books.The board decided to pay a final dividend per share of 5p, lifting the full-year payout to 7.75p per share, up 2% on 2012.Melrose explained that the 2013 results were not directly comparable to 2012 given that the prior year only included four months of Elster. For a more appropriate comparative, pro-forma results - which assume a full year's ownership of the division in 2012 - show that operating profits rose 20% while revenues fell 3%.Chairman Christopher Miller said that is has been "an extremely busy year" for the company with the integration of Elster, as well as the disposal of the five FKI businesses: Truth, Marelli, Crosby, Acco and Harris. These were sold during the year for a total of £950m, £600m of which was returned to shareholders last month.Miller said: "Last year was a tremendous year for Melrose with great successes in the 'improve' and 'sell' parts of our strategy. Almost £1bn was raised from disposals which trebled shareholders' money and Elster increased its profits by over a third in our first full year of ownership."We are ready and keen to buy again but we remain patient for the right opportunity to arise."BC