8 loss years were recorded (limit 2), and average operating margin was negative (must be zero or higher), and margins varied 511.4% around their average (limit 35%).
- 10y median
- -2.5%
- Worst year
- -9.1%
- Latest · 2025
- 16.7%
# Melrose Industries (MRO.LSE)
Canonical: https://gigainvestors.com/s/MRO.LSE
Analysis as of: 2026-10-16T07:36:22.974Z. Financial observations: FY2003–FY2025.
Listing currency: GBX. Reporting currency: GBP.
## Verdict
Not a wonderful business
Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.
Share price: GBX 477.70 per share; close as of 2026-10-15.
Estimated value: low GBX 168.78 per share, central GBX 191.01 per share, high GBX 220.60 per share. Buy at or below the central value GBX 191.01 per share. Valuation as of 2026-10-16T07:36:22.974Z; scenarios are not confidence intervals.
Expected annual return: 5.7% at the stated quote. About 5.7% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; GB 10-year bond 5.4% + 4 points).
## Checklist
### understandable: fail
- 3 revenue declines in the last 10 years (informational)
- more than 2 net loss years
- negative average operating margin
- operating margin variation exceeds 0.35
- Financial history: 10 years
- Years with declining revenue: 3
- Years with a net loss: 8
- Operating margin variation: 5.11×
Chart: Operating margin; fiscal year observations.
- FY2016: -0.07×
- FY2017: -0.00×
- FY2018: -0.05×
- FY2019: 0.03×
- FY2020: -0.07×
- FY2021: -0.07×
- FY2022: -0.09×
- FY2023: 0.02×
- FY2024: -0.00×
- FY2025: 0.17×
### moat: fail
- ROIC median below threshold
- ROIC worst years below threshold (more than 1 bad year allowed)
- ROIC, median of available years: -2.0%
- ROIC, second-lowest year: -5.7%
- Typical minus recent gross margin: -3.2 pp
- Typical gross margin (annual median): 20.5%
- Recent gross margin (lower of latest and 3-year median): 23.7%
- Years with nonpositive capital: 0
- Capital spending / revenue: 3.6%
- ROIC including acquisitions, ten-year median: 1.6%
Chart: ROIC excluding acquisitions; fiscal year observations.
- FY2016: -4.6%
- FY2017: -0.5%
- FY2018: -4.0%
- FY2019: 2.7%
- FY2020: -5.7%
- FY2021: -6.6%
- FY2022: -3.5%
- FY2023: 1.3%
- FY2024: -0.1%
- FY2025: 13.1%
### economics: pass
- Cash conversion uses consolidated totals: No
- Owner earnings, five-year total: GBP 1.1B
- Net income, five-year total: GBP -173M
- Return on incremental invested capital: >100%
- Working capital / revenue, annual change: -0.7 pp
- Working capital / revenue, change between three-year averages: -10.4 pp
- Working capital / revenue, final three-year average: 21.5%
Chart: Owner earnings · five years; fiscal year observations.
- FY2021: GBP 1.4B
- FY2022: GBP -274M
- FY2023: GBP -750M
- FY2024: GBP 178M
- FY2025: GBP 599M
### management: fail
- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)
- potential debt-funded buybacks (informational)
- buybacks leaned toward cheaper years (informational)
- ROIC first 3 years vs last 3 years: -4.0% vs 1.3%
- Per-share earnings: -0.02 to -0.04 (three-year endpoint medians)
- per-share value declined or ends nonpositive
- Management verdict uses per-share economic progress: Yes
- Ordinary dilution, 10-year annual growth: 3.0%
- Ordinary dilution, 5-year annual growth: -2.9%
- Market cap gain: GBP 3.1B
- Cumulative retained earnings: GBP 1.3B
- Diluted shares, 10-year annual growth: 3.0%
- Diluted shares, 5-year annual growth: -2.9%
- $1 test, starting fiscal year: FY2016
- $1 test, ending fiscal year: FY2025
- Per-share value change: GBP -0.02
- Per-share value, starting three-year median: GBP -0.02
- Per-share value, ending three-year median: GBP -0.04
- Buybacks concentrated in cheaper years (correlation): 0.31
- Average buyback yield: 15.4%
- Buyback history: 6 years
- Debt-funded buybacks: Yes
- Acquisition spending: GBP 14B
- Cumulative net income, 10 years: GBP -1.3B
- ROIC, first three-year median: -4.0%
- ROIC, last three-year median: 1.3%
Chart: Earnings per share; fiscal year observations.
- FY2016: GBP -0.03
- FY2017: GBP -0.02
- FY2018: GBP -0.37
- FY2019: GBP -0.04
- FY2020: GBP -0.37
- FY2021: GBP 0.54
- FY2022: GBP -0.23
- FY2023: GBP -0.75
- FY2024: GBP -0.04
- FY2025: GBP 0.29
### accounting: pass
- Sloan accruals: 2.1%
- Receivables to sales index (DSRI): 0.99×
- Restructuring years, last five: 0
- Stock compensation / operating cash flow: 0.5%
- Earnings backed by cash: Yes
- Operating cash / earnings: 0.58×
- Accounting red flags: 0
- Goodwill and intangibles / equity: 0.95×
Chart: Sloan accruals; fiscal year observations.
- FY2016: -2.5%
- FY2017: -1.8%
- FY2018: -4.3%
- FY2019: -4.4%
- FY2020: -8.1%
- FY2021: 4.1%
- FY2022: -3.7%
- FY2023: -15.1%
- FY2024: 1.0%
- FY2025: 2.1%
## Holders
## Price story
Down 29% since Mar 2024 · "Melrose shares fall 3.5% as Garden Grove incident drives £30m exceptional cost outlook" (finance.yahoo.com, Jul 2026) · sales +3.5%
Story as of 2026-10-16T10:00:07.314Z; price observation 2026-10-15.
Price needs cash profits to grow 12.8% a year for ten years
- 2026-02-27: Melrose Industries’ Shares Tumble on Light Guidance ([finance.yahoo.com](https://finance.yahoo.com/m/67b2ce02-a74f-3628-96ba-75123494a46e/melrose-industries%E2%80%99-shares.html))
- 2026-07-31: Melrose shares fall 3.5% as Garden Grove incident drives £30m exceptional cost outlook ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/melrose-shares-fall-3-5-082900107.html))
### Sales · FY2024–2025
sales +3.5%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.
- FY2016: GBP 889M
- FY2017: GBP 2.1B
- FY2018: GBP 8.2B
- FY2019: GBP 11B
- FY2020: GBP 7.1B
- FY2021: GBP 6.7B
- FY2022: GBP 3.0B
- FY2023: GBP 3.4B
- FY2024: GBP 3.5B
- FY2025: GBP 3.6B
### Gross margin · FY2025
gross margin 26.6%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.
- FY2016: 31.7%
- FY2017: 31.2%
- FY2018: 20.6%
- FY2019: 20.4%
- FY2020: 11.2%
- FY2021: 13.5%
- FY2022: 14.3%
- FY2023: 19.5%
- FY2024: 23.7%
- FY2025: 26.6%
## Owner memo
Memo as of 2026-10-16T08:06:05.509Z.
### How it makes money
Operates in specialty industrial machinery; annual sales are GBP 3.6 billion.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); FY2025: revenue 3589000000; grossProfit 954000000; margin = grossProfit / revenue.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); MRO.LSE: Melrose Industries PLC, together with its subsidiaries, designs and delivers aerospace components and systems for civil and defence markets in the United Kingdom, rest of Europe, North America, and internationally. The company operates through Engines and Airframes segments. The Engines segment offers structural engineered components; parts repair; commercial and aftermarket contracts; engine mount structures; fan cases and turbine cases; and shafts and rotating components to engines original equipment manufacturers. The Airframes segment provides civil and defence air frames, including lightweight composite and metallic structures; electrical distribution systems and components; wing structures; empennage; fuselage; electrical wiring interconnection systems ("EWIS"); landing gear and ice protection systems; and aircraft transparencies to airframe original equipment manufacturers. The company was formerly known as New Melrose Industries PLC and changed its name to Melrose Industries PLC in November 2015. Melrose Industries PLC was founded in 2003 and is headquartered in London, United Kingdom.
### Why customers stay
Margins ranged from 19.5% to 26.6% during 2023–25; it lost 2% on its capital.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); FY2023: grossProfit / revenue = 19.5%.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); FY2024: grossProfit / revenue = 23.7%.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); FY2025: grossProfit / revenue = 26.6%.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); 10-year return on capital observations [[2016,-0.046166397874964425],[2017,-0.005416258570029383],[2018,-0.040387054161162485],[2019,0.026879063719115734],[2020,-0.05677833530106258],[2021,-0.06573333333333334],[2022,-0.03525037183936539],[2023,0.013362017804154303],[2024,-0.0009207459207459207],[2025,0.13060544448209646]]; median -0.02033331520469739. ROIC follows the displayed moat series; financial companies use return on tangible equity.
### Where the cash goes
Paid dividends in 10 of 10 years; bought back GBP 173 million of shares.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); FY2017: growth capex 0; upkeep 48000000; owner earnings 41000000. Growth capex / owner earnings = 0.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); FY2019: growth capex 0; upkeep 519000000; owner earnings 336600000. Growth capex / owner earnings = 0.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); FY2020: growth capex 0; upkeep 290000000; owner earnings 156000000. Growth capex / owner earnings = 0.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); FY2021: growth capex 0; upkeep 238000000; owner earnings 1376800000. Growth capex / owner earnings = 0.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); FY2024: growth capex 0; upkeep 123000000; owner earnings 177600000. Growth capex / owner earnings = 0.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); FY2025: growth capex 0; upkeep 95000000; owner earnings 599000000. Growth capex / owner earnings = 0.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); Dividend observations: [[2016,5800000],[2017,63000000],[2018,129000000],[2019,231000000],[2020,69000000],[2021,69000000],[2022,77000000],[2023,81000000],[2024,72000000],[2025,82000000]]. Zero only counted when supported by a complete cash-flow statement.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); FY2025: cash repurchases 173000000 GBP.
### Are managers owners
Insiders own 0.2% of the company.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); MRO.LSE SharesStats.PercentInsiders = 0.22300000000000003 percentage points; cache date 2026-10-16.
### What the price says
The price assumes cash profits grow 12.8% yearly over ten years; actual decline was 10.9%.
- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:22.974Z); Ten-year compound average after fade. Initial solved rate 0.17129352492701455. Price 477.7; FX 100; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.5048652741897939 → FY2025 0.4763813468469758. Closing-price date 2026-10-15.
## Monthly share-price history (GBX per share)
- 2016-10: GBX 322.50 per share
- 2016-11: GBX 350.21 per share
- 2016-12: GBX 377.92 per share
- 2017-01: GBX 373.15 per share
- 2017-02: GBX 407.55 per share
- 2017-03: GBX 426.18 per share
- 2017-04: GBX 451.98 per share
- 2017-05: GBX 457.24 per share
- 2017-06: GBX 463.45 per share
- 2017-07: GBX 444.14 per share
- 2017-08: GBX 420.45 per share
- 2017-09: GBX 406.69 per share
- 2017-10: GBX 420.26 per share
- 2017-11: GBX 382.03 per share
- 2017-12: GBX 405.54 per share
- 2018-01: GBX 432.68 per share
- 2018-02: GBX 436.31 per share
- 2018-03: GBX 441.47 per share
- 2018-04: GBX 435.74 per share
- 2018-05: GBX 451.02 per share
- 2018-06: GBX 406.50 per share
- 2018-07: GBX 412.61 per share
- 2018-08: GBX 425.99 per share
- 2018-09: GBX 382.03 per share
- 2018-10: GBX 322.31 per share
- 2018-11: GBX 337.50 per share
- 2018-12: GBX 313.14 per share
- 2019-01: GBX 322.31 per share
- 2019-02: GBX 332.34 per share
- 2019-03: GBX 350.02 per share
- 2019-04: GBX 386.43 per share
- 2019-05: GBX 313.33 per share
- 2019-06: GBX 345.63 per share
- 2019-07: GBX 357.28 per share
- 2019-08: GBX 345.82 per share
- 2019-09: GBX 385.28 per share
- 2019-10: GBX 407.26 per share
- 2019-11: GBX 438.79 per share
- 2019-12: GBX 458.86 per share
- 2020-01: GBX 445.67 per share
- 2020-02: GBX 400.19 per share
- 2020-03: GBX 174.87 per share
- 2020-04: GBX 190.69 per share
- 2020-05: GBX 220.07 per share
- 2020-06: GBX 217.87 per share
- 2020-07: GBX 162.94 per share
- 2020-08: GBX 194.55 per share
- 2020-09: GBX 220.73 per share
- 2020-10: GBX 228.67 per share
- 2020-11: GBX 293.36 per share
- 2020-12: GBX 340.28 per share
- 2021-01: GBX 322.02 per share
- 2021-02: GBX 317.06 per share
- 2021-03: GBX 318.97 per share
- 2021-04: GBX 311.32 per share
- 2021-05: GBX 330.05 per share
- 2021-06: GBX 296.42 per share
- 2021-07: GBX 305.97 per share
- 2021-08: GBX 352.00 per share
- 2021-09: GBX 365.24 per share
- 2021-10: GBX 331.14 per share
- 2021-11: GBX 304.28 per share
- 2021-12: GBX 335.55 per share
- 2022-01: GBX 312.67 per share
- 2022-02: GBX 311.10 per share
- 2022-03: GBX 262.00 per share
- 2022-04: GBX 247.83 per share
- 2022-05: GBX 284.14 per share
- 2022-06: GBX 314.14 per share
- 2022-07: GBX 336.91 per share
- 2022-08: GBX 286.44 per share
- 2022-09: GBX 214.47 per share
- 2022-10: GBX 245.31 per share
- 2022-11: GBX 277.32 per share
- 2022-12: GBX 282.25 per share
- 2023-01: GBX 298.40 per share
- 2023-02: GBX 314.46 per share
- 2023-03: GBX 349.40 per share
- 2023-04: GBX 409.00 per share
- 2023-05: GBX 471.60 per share
- 2023-06: GBX 506.20 per share
- 2023-07: GBX 530.00 per share
- 2023-08: GBX 512.60 per share
- 2023-09: GBX 469.20 per share
- 2023-10: GBX 467.00 per share
- 2023-11: GBX 518.60 per share
- 2023-12: GBX 567.40 per share
- 2024-01: GBX 590.80 per share
- 2024-02: GBX 635.00 per share
- 2024-03: GBX 673.00 per share
- 2024-04: GBX 631.80 per share
- 2024-05: GBX 615.80 per share
- 2024-06: GBX 553.40 per share
- 2024-07: GBX 588.80 per share
- 2024-08: GBX 481.90 per share
- 2024-09: GBX 455.70 per share
- 2024-10: GBX 475.00 per share
- 2024-11: GBX 574.40 per share
- 2024-12: GBX 553.80 per share
- 2025-01: GBX 613.20 per share
- 2025-02: GBX 641.00 per share
- 2025-03: GBX 475.10 per share
- 2025-04: GBX 433.60 per share
- 2025-05: GBX 468.10 per share
- 2025-06: GBX 530.80 per share
- 2025-07: GBX 512.20 per share
- 2025-08: GBX 588.00 per share
- 2025-09: GBX 608.80 per share
- 2025-10: GBX 625.60 per share
- 2025-11: GBX 595.00 per share
- 2025-12: GBX 588.40 per share
- 2026-01: GBX 626.00 per share
- 2026-02: GBX 565.80 per share
- 2026-03: GBX 502.80 per share
- 2026-04: GBX 481.50 per share
- 2026-05: GBX 470.70 per share
- 2026-06: GBX 474.90 per share
- 2026-07: GBX 454.30 per share
- 2026-08: GBX 515.20 per share
- 2026-09: GBX 476.10 per share
- 2026-10: GBX 449.80 per share
## Annual estimated value (GBX per share)
- FY2016: low GBX 354.93 per share, central GBX 403.55 per share, high GBX 468.27 per share
- FY2017: low GBX 806.23 per share, central GBX 917.40 per share, high GBX 1,065.38 per share
- FY2018: low GBX 156.43 per share, central GBX 175.22 per share, high GBX 200.24 per share
- FY2019: low GBX 180.55 per share, central GBX 226.29 per share, high GBX 261.40 per share
- FY2020: low GBX 116.38 per share, central GBX 130.83 per share, high GBX 150.07 per share
- FY2021: low GBX 126.19 per share, central GBX 140.52 per share, high GBX 159.61 per share
- FY2022: low GBX 74.15 per share, central GBX 81.36 per share, high GBX 90.95 per share
- FY2023: low GBX 59.26 per share, central GBX 67.43 per share, high GBX 78.31 per share
- FY2024: low GBX 62.73 per share, central GBX 71.19 per share, high GBX 82.45 per share
- FY2025: low GBX 167.26 per share, central GBX 189.29 per share, high GBX 218.62 per share
Historical values use today's bond yield for every fiscal year
Historical values use today's FX rate into trading currency for every fiscal year
Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates
Prior published observations retained from 2026-10-15T06:42:12.106Z where newer inputs omit a numeric field or fiscal period.
## Sources
Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.← Companies
Melrose Industries
MRO · LSE
FTSE 100 · STOXX Europe 600
Not a wonderful business
3 quality tests fail. A lower price would not fix the business.
- Share price
- GBX 477.70
- Buy up to
- GBX 191.01
- Expected / yr
- 5.7% at today's price (10.0% at central value)
The business
- How it makes money
- Why customers stay
- Where the cash goes
- Are managers owners
- What the price says
1. Is this a good business?
Capital return excluding acquisitions: median -2% (minimum 15%), and the second-worst year -5.7% (minimum 10%).
- 10y median
- -2.0%
- Worst year
- -6.6%
- Latest · 2025
- 13.1%
Owners received 1.1 billion over five years (must be positive).
- 5y median
- GBP 178M
- Worst year
- GBP -750M
- Latest · 2025
- GBP 599M
Per-share value fell from -0.02 to -0.04, comparing three-year medians at each end (must rise and stay positive).
- 10y median
- GBP -0.04
- Worst year
- GBP -0.75
- Latest · 2025
- GBP 0.29
Profits were backed by cash: accruals were 2.1% of assets (limit 10%).
- 10y median
- -3.1%
- Worst year
- 4.1%
- Latest · 2025
- 2.1%
Profit record · fail 8 loss years in 10 (at most 2), mean operating margin -1.4%, three-year average owner earnings per share 0.02 GBP. 8 loss years in the last 10; at most 2 allowed. Mean operating margin over the last ten years is negative.
2. Is the price low enough?
| Value range | GBX 168.78 – GBX 220.60 |
|---|---|
| Buy at or below | Central value GBX 191.01 |
| Discount to value | 1 − 477.70 / 191.01 = -150.1% |
| Return / year | About 5.7% a year at today's price (required return 10.0%) |
| Cash-flow inputs | Owner cash GBX 14.75/share; 0.0% growth for 5 years, then fades to 3.0%; excess cash GBX 7.56/share today. |
| Required return | 10.0% / year, earned by construction at the central value |
RevenueGBP 3.6B
FY2016 · Revenue: GBP 889M; FY2017 · Revenue: GBP 2.1B; FY2018 · Revenue: GBP 8.2B; FY2019 · Revenue: GBP 11B; FY2020 · Revenue: GBP 7.1B; FY2021 · Revenue: GBP 6.7B; FY2022 · Revenue: GBP 3.0B; FY2023 · Revenue: GBP 3.4B; FY2024 · Revenue: GBP 3.5B; FY2025 · Revenue: GBP 3.6B
Owner earningsGBP 599M
FY2016 · Owner earnings: GBP -3.6M; FY2017 · Owner earnings: GBP 41M; FY2018 · Owner earnings: GBP -183M; FY2019 · Owner earnings: GBP 337M; FY2020 · Owner earnings: GBP 156M; FY2021 · Owner earnings: GBP 1.4B; FY2022 · Owner earnings: GBP -274M; FY2023 · Owner earnings: GBP -750M; FY2024 · Owner earnings: GBP 178M; FY2025 · Owner earnings: GBP 599M
Operating margin16.7%
FY2016 · Operating margin: -6.9%; FY2017 · Operating margin: -0.3%; FY2018 · Operating margin: -4.7%; FY2019 · Operating margin: 2.9%; FY2020 · Operating margin: -6.8%; FY2021 · Operating margin: -7.4%; FY2022 · Operating margin: -9.1%; FY2023 · Operating margin: 1.7%; FY2024 · Operating margin: -0.1%; FY2025 · Operating margin: 16.7%
Net cash / debtGBP -1.7B
FY2016 · Net cash / debt: GBP -540M; FY2017 · Net cash / debt: GBP -568M; FY2018 · Net cash / debt: GBP -3.4B; FY2019 · Net cash / debt: GBP -3.8B; FY2020 · Net cash / debt: GBP -3.3B; FY2021 · Net cash / debt: GBP -1.3B; FY2022 · Net cash / debt: GBP -1.5B; FY2023 · Net cash / debt: GBP -764M; FY2024 · Net cash / debt: GBP -1.6B; FY2025 · Net cash / debt: GBP -1.7B
Diluted shares1.3B
FY2016 · Diluted shares: 1.1B; FY2017 · Diluted shares: 1.2B; FY2018 · Diluted shares: 1.3B; FY2019 · Diluted shares: 1.6B; FY2020 · Diluted shares: 1.5B; FY2021 · Diluted shares: 1.5B; FY2022 · Diluted shares: 1.4B; FY2023 · Diluted shares: 1.4B; FY2024 · Diluted shares: 1.4B; FY2025 · Diluted shares: 1.3B
Prices 15 Oct 2026 · FY2025