Melrose revenue jumps 11% as aerospace demand stays resilient

Melrose Industries said resilient aerospace demand pushed first-quarter revenue up 11% at constant currency, yet the group’s latest update also showed how freight inflation is still nibbling at industrial profits. Engines delivered the strongest performance, rising 20% in the three months to March 31, while Airframes increased 4% as defense demand outpaced softer civil volumes.

The London-based owner of GKN Aerospace said adjusted operating profit for the group and both divisions was “well ahead” of the same period last year, underscoring that the business is converting stronger demand into higher earnings even as transport costs remain elevated. Engines growth came from both original equipment and aftermarket activity, with especially strong repairs and military work. Airframes posted double-digit defense growth, partly offset by civil sales that were only slightly ahead of the prior-year period because lower narrowbody volumes trailed broader market conditions.

That split matters for investors because it shows a business benefiting from the parts of aviation that are still running hot, while also facing the less visible cost pressures that can erode margins. Melrose said it has no operating footprint in the Middle East and minimal direct supply-chain exposure there, but it is seeing inflationary pressure from higher freight costs and is watching for any reduction in civil flying hours if jet-fuel availability and prices are affected by conflict in the region.

Management kept full-year 2026 guidance unchanged, signaling confidence that the current momentum can hold through a seasonally stronger second half. Melrose still expects revenue of £3.75 billion to £3.95 billion, adjusted operating profit of £700 million to £750 million, and free cash flow of £150 million to £200 million after interest and tax. The company said profit and cash will be weighted to the second half, in line with historical and industry seasonality.

The update followed Melrose’s annual general meeting on April 29 at The Royal Aeronautical Society at 4 Hamilton Place in London, where shareholders backed all 21 resolutions. It also builds on February’s full-year results, when Melrose reported 2025 revenue of £3.59 billion, up 8%, adjusted operating profit of £647 million, up 23%, and free cash flow of £125 million. Even then, the company warned that supply-chain constraints, tariff uncertainty and bottlenecks at Airbus, Pratt & Whitney and GE remained key risks.