Melrose Industries: Clarity On Garden Grove Is Positive, But Uncertainties Remain

Stephen Simpson 20.97K Followers Follow Summary Melrose Industries PLC has made progress resolving the Garden Grove accident, including a quick timeline to restoring full production and establishing a $100M claims fund. The core MLSPF business remains strong, with the first half seeing 10% revenue growth and 16% adjusted profit growth, with even stronger growth (19% and 21%) in the Engines segment. Civil aerospace backlogs remain robust, and defense spending is on the upswing, providing a healthy runway for multiple years of meaningful revenue growth and margin leverage. Executing on margin improvements, particularly in the Airframe business, and improving free cash flow efficiency are critical next steps. I see meaningful upside for MLSPF if management delivers on margin expansion and cash flow efficiency amid ongoing investor skepticism. aapsky/iStock via Getty Images The last 18 months have generally been positive for aerospace companies, as air traffic has been healthy and production schedules for major OEMs like Airbus SE ( EADSF )( EADSY ) and The Boeing Company ( This article was written by Stephen Simpson 20.97K Followers Follow Stephen Simpson is a freelance financial writer and investor.Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds). Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.