Shares of Melrose Industries (LON: MRO) have surged 13% despite the company announcing a drop in revenue and a reduction in its workforce after sales declined.
In its first-half results for the six months ending the 30th of June, the company reported a pre-tax loss of £685 million and an adjusted pre-tax loss of £40 million.
Melrose stated that its sales in aerospace had reduced by 18% in the period and that it faces a “significant reduction” in its workforce with restructuring projects “well underway.”
However, the firm also said that “trading over the summer months has been at the higher end of the Board’s expectations, particularly in automotive and key Nortek markets,” and there are a “number of encouraging signs of recovery in Automotive and Power Metallurgy.”
Justin Dowley, Melrose’s Chairman, said: “These are extraordinary times which we have addressed with rigorous cash management and decisive restructuring actions; recently, and encouragingly, we have started to see trading improving in some key end markets.
“Crucially, we own good businesses with significant improvement opportunities and have an experienced management team with an excellent track record.”
Melrose share price…
Despite the negatives within the statement, investors seem to be focused on the positive and encouraging signs from its European, Chinese and North American business as its share price surged higher after the report was released.
Initially trading as high as 114.10p per share, it is now trading at 112.45p, up 11.90% on the day.
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