Melrose Industries PLC expects aerospace division to break even after job cuts

() said it expects the group’s aerospace division to break even after resorting to massive job cuts among other cost-saving measures in the face of the coronavirus (COVID-19) pandemic.

Overall, the FTSE 100-listed group said it is currently trading at the top end of the board’s expectations for 2020, though it did not provide forward guidance considering the continued uncertainty except that its net debt should be reduced.

READ: Melrose shares jump as it reports large loss and major job cuts

The company said its performance reflected a faster than expected recovery in automotive markets, first seen over the summer, the continued strong performance in Nortek Air Management, and the more challenging, although currently stable, market conditions in Aerospace.

In the latter, sales still tanked 37% in the four months to October 31, 2020, broadly in line with the trends seen since the onset of the pandemic.

Automotive & Powder Metallurgy saw revenue dropping 3% and 7% respectively in the period, though the stronger trends are boosted by the impact of the General Motors strike in 2019. They both returned to profitability, achieving operating margins over 6% and 7% respectively.

Meanwhile, Nortek Air Management has continued to trade well with revenue growth of 13%, its highest performance under Melrose ownership, thanks to the success of its new technologies, strong market positioning, adept operational and supply chain management and a rebounding residential housing construction market.