Latest news with #PeterDilnot
Daily Mail
2 days ago
- Business
- Daily Mail
Melrose boss soars to top of the Footsie pay league
The boss of Britain's biggest company has been knocked off his perch as the FTSE 100's highest-paid chief executive, The Mail on Sunday can reveal. Pascal Soriot, who runs drugs giant AstraZeneca, has slipped to third place in our annual survey of boardroom pay, known as the Fat Cat Files. He has been replaced at the top by the relatively unknown Peter Dilnot, who along with his predecessor Simon Peckham shared more than £100 million at engineer Melrose last year. The size of their private equity-style pay packets sparked the largest shareholder revolt seen this year when almost two thirds of investors voted against Melrose's remuneration report. Our survey also found that: The total paid to FTSE 100 bosses has surpassed £500 million for the first time; Top executives netted an average of £5.5 million each last year, up 11 per cent on the previous year, as their earnings grew at more than twice the rate of the national average; Melrose overtook Tesco as the firm with the largest pay gap between its boss and a typical worker. Soriot was the highest paid FTSE 100 boss last year after AstraZeneca shares soared following the successful roll-out of its Covid vaccine and revival of its drugs pipeline and portfolio. But his pay – a big chunk of which is linked to share price growth – fell to £14.7 million from £16.9 million in 2024 after the company's stock market rally stalled. It meant he was also leapfrogged in the big pay league by the new boss of education publisher Pearson. Omar Abbosh was handed £16.3 million last year – the bulk of which involved buying out the executive from his contract with Microsoft. However, not all bosses shared in the bonanza. Rolls-Royce's Tufan Erginbilgic took a pay cut of almost £10 million, despite the engineer's stellar share price performance. He took home £4.1million, down from £13.6 million the previous year, due to the absence of a one-off £7.5 million payment he received for lost earnings at his previous job with BP. Emma Walmsley again was the highest-paid female boss, though her pay at Glaxo SmithKline dipped from £12.7 million to £10.6 million. But she could land up to £22 million this year with the drugs maker under a US-style pay packet. The huge payouts at Melrose, owner of the GKN aerospace business, means it replaced supermarket chain Tesco as the FTSE 100 firm with the largest pay gap between its chief executive and a typical worker. Its accounts show that chief executives Dilnot and Peckham were paid 1,112 times more than the £53,000 received by the average Melrose employee. It means the duo earned more in a few hours than the rest of the workforce were paid all year. Dilnot took home more than £45million and Peckham, who stood down as boss in March 2024, netted almost £58 million under a controversial 'long-term incentive' bonus scheme. Two other directors, Christopher Miller and Geoffrey Martin, received £50 million and £57 million respectively under the same plan in one of the biggest payouts in UK corporate history. Only Dilnot, a Sandhurst-educated former army helicopter pilot, is still at Melrose. The aerospace group's fortunes have been transformed by a series of deals, including the purchase of defence giant GKN in 2018. The company is now worth £7.5 billion, having more than doubled in value since the executive bonus scheme was agreed more than four years ago. A demerger of GKN's automotive arm into another stock market firm, Dowlais, gave the share price a further boost. The Melrose pay vote, which was advisory rather than binding, was one of the biggest shows of investor frustration in recent years. The scale of the rebellion recalled the row over a £75 million package paid to Jeff Fairburn at Persimmon in 2018. Fairburn was ousted from the builder just four months after landing his bonus, which share owners slammed as 'grossly excessive' and voted down. But for some in the City these pay packages are not too high, but rather too low. AstraZeneca, which is valued at almost £175 billion, is one of a number of blue chip firms that may shift their main stock market listing to New York – in part because of concerns that boardroom pay is lower in London.
Times
01-08-2025
- Business
- Times
Melrose defies tariffs and supply woes to beat profit forecast
A leading aerospace business's first-half profits were above forecasts in the face of disruption caused by President Trump's tariffs and long-running aerospace supply chain issues. Operating profits at Melrose, the owner of GKN Aerospace, were £310 million for the six months ended June 30, compared with a company-compiled analysts' consensus of £299 million. Revenue rose 6 per cent to £1.7 billion, driven by a particularly strong performance from Melrose's engines division, which supplies parts to the likes of Rolls-Royce and the US-based Pratt & Whitney. The performance sent shares up more than 5 per cent on a day that markets were backed into a retreat as Trump introduced a slew of fresh tariffs. Melrose was buoyed last week by news that the US-EU trade deal had granted a tariff exemption for aircraft and aviation parts, although it said on Friday it had successfully mitigated the 'direct impact' of the current levies on its half-year bottom line. The FTSE 100 group has a significant presence in the US, which makes up nearly two thirds of its sales, and it recently opened a multimillion-pound factory in San Diego. It does, however, run an operation in Mexico, which exports to both Europe and the United States. 'We delivered a strong performance in the first half with a 29 per cent improvement in profit and cashflow significantly stronger than last year despite the backdrop of supply chain and tariff disruptions,' Peter Dilnot, chief executive, said. • One-sided trade deal suggests outsider status has benefited Britain Melrose has benefited from a twin boom in defence and aviation. Conflict in Ukraine and the Middle East has led to governments increasing military spending budgets, while travel demand has soared in the post-pandemic era, leading to record order backlogs for new aircraft. It has, however, faced hurdles from wider supply chain issues affecting the aerospace industry, which have fuelled problems at the planemakers Boeing and Airbus. Those difficulties were further compounded by the additional complexity of Trump's trade levies. Dilnot said he was confident of delivering sustained increases in profit and cashflow in the years ahead and a £600 million free cashflow target by 2029. Melrose has managed to offset some of the impact from supply chain snarl-ups thanks to increasing demand for its aftermarket services, as companies look to get more life out of older aircraft. Dilnot said that despite lower growth forecasts for global air travel, 'constrained build rates' for new aircraft coupled with record order backlogs had forced airlines to make better use of their fleets, 'fuelling' aftermarket growth. • North Sea oil is a 'treasure chest' for the UK, says Donald Trump Operating profit at Melrose's engines division grew by more than a quarter to £261 million over the half-year period, alongside a 6 per cent rise in engine flying hours. Revenue increased 11 per cent to £781 million. Its structures division reported a near-third rise in operating profit to £63 million, with a strong 10 per cent revenue growth in defence. The company supplies parts for some of the largest defence programmes in the world, including Chinook helicopters and F-35 fighter jets. Recent contract awards include the extension of a six-year tie-up with BAE Systems to provide parts for its Eurofighter Typhoon jet, and a five-year deal with the US defence giant Lockheed Martin. Melrose's board has set an interim dividend of 2.4 pence per share for 2025, up 20 per cent year-on-year. The company is currently £91 million through a £250 million, 18-month, share buyback programme. Founded in 2003 by Christopher Miller, David Roper and Simon Peckham, Melrose floated on London's Aim market the same year. After rising to the FTSE 100, its market capitalisation now sits at about £6.87 billion.
Reuters
01-08-2025
- Business
- Reuters
UK's Melrose shares jump on profit beat, slowing cash burn
Aug 1 (Reuters) - GKN Aerospace owner Melrose Industries (MRON.L), opens new tab on Friday beat expectations for first-half profit and posted a significantly lower cash outflow, sending its shares as much as 8% higher. While geopolitical tensions are fuelling defence spending and growth for aerospace suppliers, U.S. President Donald Trump's sweeping tariffs are forcing companies like Melrose to reassess their supply chains and negotiate pricing. CEO Peter Dilnot told Reuters he was pleased with Washington's trade agreement with the UK and provisional deal with the European Union as aerospace parts exemptions would avoid potential threats to jet production and boost suppliers as well. "This is really good news for the industry. It means that you know flows of material can go, it creates an easier operating environment in the second-half," Dilnot said. Melrose said it was working with agencies across the UK, EU, and United States on new sovereign defence programmes, adding that it had largely mitigated the impact of tariffs through supply-chain adjustments and negotiations with customers and suppliers. It reported 310 million pounds ($407.5 million) in adjusted operating profit for the first half of the year, topping analysts' estimate of 299 million pounds in a company-compiled poll. That, along with lower restructuring costs, helped reduce cash outflow to 54 million pounds from 145 million pounds a year earlier. Melrose shares were up 6.8% at 546.8 pence by 1001 GMT, the biggest gainer on the FTSE 100 (.FTSE), opens new tab index. The company maintained its 2025 forecasts for revenue and profit on a constant currency basis, with free cash flow of more than 100 million pounds for the year, reaching 600 million pounds by 2029. "We see positives in the better-than-expected cash and the nice programmatic wins across both Engines/Structures," analysts at RBC Capital Markets said, referring to Melrose's business units. ($1 = 0.7607 pounds)
The Independent
01-08-2025
- Business
- The Independent
Melrose shrugs off tariff uncertainty amid boost from defence demand
GKN Aerospace owner Melrose Industries has swung to a first half profit thanks to a boost from rising demand in the defence and airlines sector. The group shrugged off disruption sparked by US President Donald Trump's trade war to post pre-tax profits of £379 million for the six months to June 30, against losses of £105 million a year ago. On an underlying basis, profits rose 24% to £248 million, while earnings lifted 29% to £310 million. Chief executive Peter Dilnot said the performance came against a 'backdrop of supply chain and tariff disruptions', which led to the firm reviewing supply chains and pricing. Shares in the FTSE 100 listed group lifted nearly 7% in morning trading on Friday as the underlying earnings came in higher than forecast. Melrose makes engine parts for jet fighters and military helicopters, as well as civil aircraft, and provides a range of technology for flights. Mr Dilnot said: 'Our multi-year transformation programme will be completed by year end and the benefits are already reading through with more to come. 'We have a clear strategy underpinned by attractive aerospace and defence markets, differentiated technology and established positions on the world's leading civil and defence aircraft.' He added the group was 'confident about delivering sustained increases in profit and cash flow in the years ahead'. Melrose kept its full year guidance unchanged on a constant currency basis, but the stronger pound against the US dollar saw it trim forecasts on a reported basis. It now expects reported underlying operating profits of between £620 million to £650 million, against the £650 million to £690 million previously pencilled in. Guidance for reported revenues was trimmed to between £3.43 billion and £3.58 billion, from the previous range of £3.55 billion to £3.7 billion. But the guidance does not include any direct or indirect impact of tariffs. Melrose has taken action to offset the impact of trade tariffs by adjusting its supply chain, negotiating with customers and suppliers, and the use of so-called drawback, which involves reclaiming taxes on imported goods that are later exported. It said: 'The industry continues to navigate the impact of these new trade restrictions which have put pressure on supply lines and customer deliveries. 'In response, we took immediate action to assess their impact and as a result of working closely with our partners and customers, have actioned a plan to successfully mitigate our identified direct exposure. 'Here, our global footprint provides us with excellent operational agility including the ability to rebalance production quickly and efficiently.'
The Independent
30-04-2025
- Business
- The Independent
Aerospace giant Melrose says US tariffs creating ‘complexity' for industry
Global aerospace business Melrose Industries has said it has moved 'swiftly' to alleviate the impact of US tariffs which have complicated trade across the industry. The company, which makes engine parts for aircraft and provides a range of technology for flights, said it is closely monitoring the situation. Chief executive Peter Dilnot said: 'The recent introduction of tariffs has created additional complexity across the aerospace industry.' Earlier this month, US President Donald Trump introduced sweeping new levies on US imports, at varying rates for different countries and goods being supplied. This included a 25% charge on aluminium and steel imports – materials which are typically used for components that make up aircraft structures and engines. Boeing, a US-based aeroplane manufacturer, recently said its customers in China have indicated they will not take deliveries, in a sign of the escalating trade conflict between the two countries. But Melrose told shareholders it has managed to take a number of measures to mitigate the impact of tariffs – specifically relating to products being exported to the US and supplied to its manufacturing sites. These measures include adjusting its supply chain, negotiating with customers and suppliers, and the use of 'drawback', which involves reclaiming taxes on imported goods that are later exported. 'We have acted swiftly to evaluate potential effects on the group and have a path to successfully mitigate our identified direct exposure at current tariff levels,' Mr Dilnot said. 'The situation remains fluid, and we will continue to work closely with our customers and suppliers to respond as needed.' The company still expects to report an adjusted operating profit of £700 million for 2025 – although this guidance does not include the impact of tariffs. Revenues are forecast to come in between £3.55 billion and £3.7 billion. Melrose added that demand within both its civil and defence markets remains strong.
