COMPANY PROFILE -Melrose Industries Plc
Business Sector :Manufacturing (including aerospace, automotive and powder metallurgy)
Operating Geography :United Kingdom , Europe, Global
About Melrose Industries Plc :
Melrose Industries is a British manufacturing company which specialises in buying and improving underperforming businesses. It is headquartered in London, United Kingdom. In 2003, the company was established by David Roper, Christopher Miller and Simon Peckham. Brush Turbogenerators, GKN and Nortek are the main subsidiaries of the company. Melrose capitalizes its acquisitions using a low level of leverage, upgrades the businesses by a combination of significant investment and changed management focus, sells them and returns the proceeds to shareholders. This British conglomerate possesses under its belt, many manufacturing and industrial businesses with leading market positions operating in a number of various geographical regions and sectors. The company has acquired, various engineering companies which include Dynacast, McKechnie, FKI,Elster, Nortek, and GKN and even sold off, some of these after booking plump profits. It serves its customers in United States and United Kingdom. The company aims to reduce the cost structure of Aerospace in 2021 to improve its business performance without relying on sales growth from the level anticipated in 2020. Melrose Industries is registered on the London Stock Exchange as a constituent of the FTSE 100 Index.
Melrose Industries' Unique Selling Proposition or USP lies in achieving the highest standards of product quality, reliability and safety in its business and for having a highly-skilled workforce. Melrose Industries's mission statement reads, "Melrose aims to increase value for shareholders through growth in our current businesses, whilst seeking acquisitions of good businesses with solid fundamentals whose performance can be improved in the medium term under Melrose management".
Melrose Industries Plc Revenue :
11,592 million pounds – FY ending 31 December, 2019 (y-o-y growth 34%)
8,645 million pounds – FY ending 31, December, 2018
Competitive Analysis of Melrose Industries Plc
The SWOT analysis for Melrose Industries Plc is presented below in a matrix followed by the detailed analysis report
Strengths | Weaknesses |
1. Seen significant success in adding value to companies it acquires with the motto of “Buy, Improve, Sell”
2. Strong presence in multiple sectors such as aerospace, automotive, powder metallurgy.
3. All Key Performance Indicators (KPI indices) show robust performance.
4. GKN Aerospace has a presence in 15 countries, serving 90% of world’s aircraft manufacturers while GKN Automotive is present across 21 countries.
| 1. High operating costs and global competition are forcing factory closure and jeopardizing jobs
2. Repeated criticism from various authorities (particularly the British Government) for engaging in hostile takeover tactics
|
Opportunities | Threats |
1. GKN aerospace (a major subsidiary) is leading UK’s venture into hydrogen propulsion system in sub regional aircraft.
2. Potential for growth with the expansion predicted for the global hybrid additive market
3. Increased focus on electronically powered engines leaves much scope for growth and development in this sector.
| 1. Suffered considerable losses amidst the COVID -19 pandemic
2. Several trade and tariff problems may crop up under ‘no deal’ Brexit.
3. Increasing risk of cyber security breaches might pose a serious threat since GKN has regular interactions with the US and UK Governments for defense purposes.
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Detailed SWOT Analysis of Melrose Industries Plc
Strength
1. Seen significant success in adding value to companies it acquires with the motto of “Buy, Improve, Sell”: Melrose bought McKechnie Aerospace for 0.4 billion pounds in and ultimately sold it for 0.8 billion pounds, bought Elster for 1.8 billion pounds, selling to Honeywell for 3.3 billion pounds and bought FKI for 1 billion pounds, selling it for 1.4 billion pounds. All of the above companies saw a margin improvement of over 30 percentage points in the time they were owned by Melrose Industries. The equity rate of return was around 30% for all the three companies. Since its takeover by Melrose in fiscal 2018, GKN has already seen a margin improvement of 10 percentage points. Melrose has spent 719 million pounds on research and development or roughly 2.8% of the revenue earned in that period. All the acquisitions were financed via fully subscribed shares indicating shareholder confidence.
The remaining section under "Strength"is available only in the 'Complete Report' on purchase.
Weakness
This section is available only in the 'Complete Report' on purchase.
Opportunity
1. GKN aerospace (a major subsidiary of Melrose) is leading UK’s venture into hydrogen propulsion system in sub regional aircraft: H2GEAR, a collaboration Programme in the UK to develop hydrogen propulsion in sub regional aircraft is being led by GKN Aerospace. The aim of this Programme is to first improve the technology to support smaller aircraft being powered by hydrogen and then eventually scale it up to bigger aircraft. Hydrogen will play a key role in the decarbonization attempts of aerospace industry as it leaves only water a byproduct of burning and GKN Aerospace is at the forefront of it all. The Programme is supported by 27 million pounds of ATI funding, matched by GKN Aerospace and its industrial partners. With investment from the UK Government, GKN is expected to develop and industrialize technology to fly aircraft with zero carbon dioxide emissions by 2026. This venture is also expected to create an estimate of 3000 jobs.
The remaining section under "Opportunity"is available only in the 'Complete Report' on purchase.
Threats
This section is available only in the 'Complete Report' on purchase.
The PESTLE analysis for Melrose Industries Plc is presented below in a table followed by the detailed analysis report
Political | Economical |
1. Chances of ‘no deal Brexit’ will have an adverse impact on the UK Economy and the manufacturing industry.
2. Melrose Industries’ GKN bid was under immense government scrutiny as an alleged hostile takeover
| 1. COVID -19 significantly affecting demand in aerospace and automotive market.
2. The automotive industry will face higher tariffs post Brexit
|
Social | Technological |
1. Increase in remote working may reduce demand for business travel impacting aviation market | 1. Increasing focus on e-vehicles will require significant investment on research and development of such technology.
2. Hydrogen powered aircraft emerging as favoured alternative to aid decarbonization of aircraft.
3. Smart technologies driving residential security and home automation market
|
Legal | Environmental |
1. Operations in highly regulated sectors require increasing complexity
2. Regulatory changes governing refrigerants used in the HVAC sector
| 1. Robust policies implemented to deal with the increasingly stringent global laws to protect the environment.
2. Helping customers deliver on their environmental goals through product innovations
|
On purchase the Melrose Industries Plc SWOT and PESTLE Analysis PDF report will reach you within minutes. At rare times, a slight delay not exceeding 4 hours might be caused.
Detailed Pestle Analysis of Melrose Industries Plc
Political
This section is available only in the 'Complete Report' on purchase.
Economic
This section is available only in the 'Complete Report' on purchase.
Social
This section is available only in the 'Complete Report' on purchase.
Technological
This section is available only in the 'Complete Report' on purchase.
Legal
This section is available only in the 'Complete Report' on purchase.
Environmental
1. Robust policies implemented to deal with the increasingly stringent global laws to protect the environment: The environmental laws for aviation have become stricter with the US Environmental Protection Agency ("EPA") issuing the first-ever U.S. greenhouse gas ("GHG") emission standards for aircraft in 2021.The Standards align with the United Nations International Civil Aviation Organization’s ("ICAO") carbon dioxide ("CO2") emission standards.
The Melrose Corporate Offices achieved the Carbon Neutral certification for 2019 -2020, owing to its emission reduction projects in accordance with The Carbon Neutral Protocol. There has been a 30% reduction in the emission of combustible fuels across GKN. In addition to this, GKN Aerospace, through its Global Technology Centre in Bristol, UK, manufactured the first composite components for the Airbus Wing of Tomorrow research Programme, representing a step change in the aerospace industry. The new Fixed Trailing Edge for the Airbus A350 XWB, is lighter and stronger than its metallic equivalent and can achieve up to 20% fuel efficiency per passenger kilometer.
The remaining section under "Environmental"is available only in the 'Complete Report' on purchase.
Major Competitors :
- American Axle & Manufacturing
- Spirit AeroSystems.
- Dana. 36,000
- Linamar
- The NORDAM Group
- TransDigm Group.
- Magellan Aerospace
- Magna International
Major Brands :
- GKN Aerospac
- GKN Automotive
- GKN Powder Metallurgy
- Nortek Air Management
On purchase the Melrose Industries Plc SWOT and PESTLE Analysis PDF report will reach you within minutes. At rare times, a slight delay not exceeding 4 hours might be caused.
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
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Melrose Industries Plc Covid-19 Impact Analysis |
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Melrose Industries Plc BCG Analysis |
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Melrose Industries Plc Segmentation, Targeting and Positioning (STP) Analysis |
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Melrose Industries Plc Ansoff Matrix Analysis |
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References used in Melrose Industries Plc SWOT & PESTLE Analysis Report
1. UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2020 - https://www.melroseplc.net/media/2573/melrose-2020-half-year-results-announcement.pdf
2. Annual Report 2019 - https://www.melroseplc.net/media/2536/melrose-ar2019.pdf
3. GKN-owner Melrose posts £581m loss and scraps dividend on Covid-19 hit - https://www.cityam.com/gkn-owner-melrose-posts-581m-loss-and-scraps-dividend-on-covid-19-hit/
4. Global Hybrid Additive Manufacturing Market – Industry Trends and Forecast to 2027 - https://www.databridgemarketresearch.com/reports/global-hybrid-additive-manufacturing-market
5. GKN Aerospace leads development of hydrogen propulsion system - https://www.aero-mag.com/gkn-aerospace-hydrogen-propulsion-28012021/
The detailed complete set of references are available on request in the 'Complete report' on purchase.
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Melrose Industries Plc SWOT and PESTLE Analysis has been conducted by Medha Sinha and reviewed by senior analysts from Barakaat Consulting.
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