* Orders rise 10 percent at Elster Gas year to date
* Orders rise 8 pct in Brush Turbogenerators
* Shares gain as much as 3.3 pct
(Adds details and analyst comments; updates share movement)
May 13 British industrial investment firm
Melrose Industries Plc said it expected orders to
accelerate in the second half of the year after rising 3 percent
in the year to date, pushing up the company's shares in morning
Melrose, which follows a private equity model of
buy-improve-sell, said its two largest businesses - consumption
meter maker Elster Gas and Brush Turbogenerators - had orders
for four and six months production, respectively.
"The higher order intake is in the higher-margin businesses,
which is positive for profits," Numis analysts David Larkam and
Scott Cagehin said in a note.
Shares in the company rose as much as 3.3 percent, making
the stock one of the top percentage gainers on the FTSE-100
Index on Tuesday.
Orders rose 10 percent at Elster Gas, which accounts for
about 40 percent of Melrose's revenue.
Orders in Brush Turbogenerators, a manufacturer of
electricity generating equipment, rose 8 percent.
"Given the weakness being reported elsewhere in
energy markets, the third consecutive quarterly increase in
order intake at Brush is very reassuring," Numis analysts said.
Melrose normally reports a 47:53 split on operating profit
between the first and second half of the year but this year it
could be closer to 42:58, Liberum analysts said in a note.
Melrose, which sold five companies in 2013 for a total of
950 million pounds, also said it was keen on making a
value-enhancing acquisition but would wait for the right price.
"Management comment that they are still keen on the next
purchase but will remain disciplined on price, (is) encouraging
in the current testosterone-boosted M&A market," the Numis
Melrose said its financial performance would likely be hurt
by an additional 1 percent if current exchange rates for the
pound continued for the rest of the year.
The company, which gets about 90 percent of its revenue from
outside of the UK, said in March it would be difficult to
achieve revenue growth this year because of the pound's strength
and that it expected "a forex headwind of about 5 percent".
They company's shares were up 1.8 percent at 292.4 pence at
(Reporting by Roshni Menon and Aashika Jain in Bangalore;
Editing by Ted Kerr and Don Sebastian)