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UPDATE 1-Melrose Industries revenue doubles on Elster acquisition
August 29, 2013 / 9:01 AM / 4 years ago

UPDATE 1-Melrose Industries revenue doubles on Elster acquisition

* First-half revenue more than doubles to 1.02 billion stg

* Headline pretax profit rises to 139.4 million stg from 65.9 million stg

* Elster contributes 569.2 million stg to revenue

* Crosby sale expected by end of the year

Aug 29 (Reuters) - Engineering turnaround specialist Melrose Industries Plc’s first-half revenue more than doubled, helped by its acquisition of Elster last August.

Revenue increased 119 percent to 1.02 billion pounds ($1.58 billion). Revenue from Elster - which makes meters for measuring gas, water and electricity consumption - was 569.2 million pounds.

“Elster is fast proving to be another great acquisition with profit already up by over a third,” Melrose Chairman Christopher Miller said.

Headline pretax profit rose to 139.4 million pounds ($216.73 million) in the six months ended June 30 from 65.9 million pounds a year earlier.

Melrose follows a private equity-type model of investing in companies, improving their performance and then selling them.

The company said the process for the potential sale of Crosby, its U.S. lifting unit, was proceeding well and that it expected to complete the sale by the end of the year.

Crosby, which makes lifting fittings and blocks for the oil and gas, construction and mining sectors, was acquired by Melrose in 2008.

“After a sale process for Crosby has completed, we would then think of doing an acquisition,” group Finance Director Geoffrey Martin told Reuters.

While the company did not give details on the planned acquisition, an analyst at Liberum Capital said the company is beginning to think about another large acquisition.

“A U.S. industrial is cheaper to restructure but a European manufacturer may also be of interest given inflexion but nothing automotive or expensively French. Something with high opex exposure is preferred,” Ben Bourne, an analyst at Liberum Capital wrote in a note.

In June, Melrose sold Marelli Motori to private equity firm Carlyle Group for 212 million euros ($283 million).

Melrose’s stock, which has risen 27.25 percent since the beginning of the year, was up 3.7 percent at 295 pence at 0834 GMT on the London Stock Exchange.

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