(Adds details, dividend, analyst comment)
Aug 28 British investment firm Melrose
Industries Plc reported a rise of 8.5 percent in
half-year pretax profit, bolstered by strong performance in its
biggest revenue-generating unit, Elster.
But weakness in the mining sector was hurting its remaining
FKI businesses of Brush and Bridon, the company said.
Headline operating margin in Elster, which makes consumption
meters, rose 2.9 percentage points to 18.9 percent, making the
business Melrose's most successful acquisition to date.
Melrose, which follows a private equity model of 'buy,
improve and sell', acquired the 100-year-old Elster engineering
group for 1.8 billion pounds in 2012.
"We believe the improvement at Elster clearly demonstrates
the potential upside from the next deal," JPMorgan Cazenove said
in a note to clients.
The brokerage reiterated its overweight rating on Melrose
and raised its price target on the stock to 333 pence from 330
Pretax profit for the six months ended June 30 increased to
69.6 million pounds ($115.49 million) from 64.1 million pounds a
First-half revenue slumped 11 percent to 780.9 million
pounds, dented by the impact of a stronger pound on Melrose,
which generates more than 85 percent of its revenue from outside
Melrose said it would pay an interim dividend of 2.8 pence
from 2.75 pence last year.
The engineering turnaround specialist's shares were up 1.2
percent in early trading on Thursday.
($1 = 0.6027 British Pounds)
(Reporting by Aashika Jain in Bangalore; Editing by Feroze