|
Melrose Industries PLC on Tuesday said the financial hit to subsidiary GKN Aerospace from an engine parts fault will be about £200 million, but this will be spread over the next three years. Shares in RTX Corp closed down 7.9% in New York on Monday, after the parent company of aerospace manufacturer Pratt & Whitney said its profit could take a hit of up to $3.5 billion for the removal of hundreds of engines powering Airbus A320neo jets as it conducts quality checks. RTX, formerly known as Raytheon, said about 600 to 700 engines will be removed for inspection over three years. The issue, which was disclosed earlier, involves the powder metal used to manufacture certain parts. Birmingham, England-based Melrose on Tuesday said GKN has a 4% programme share on the GTF PW1100G variant affected by the problem. The cost to GKN will be spread over the period to 2026. ‘RTX indicated to us and the market yesterday that the GTF rare parts issue is within the scope they outlined previously and the cash impact is now assumed to be spread over a longer-term,’ said Melrose Chief Executive Simon Peckham. ‘We confirm our confidence in achieving the previous profit and balance sheet guidance and look forward to commencing our share buyback programme in October.’ As part of its half-year results last week, Melrose announced a £500 million share buyback that will begin next month and run for 12 months. It also upgraded its 2023 guidance for operating profit and revenue, while announcing that Peckham will step down in March next year. Peckham co-founded Melrose in 2003. He will be replaced by Chief Operating Officer Peter Dilnot. Melrose shares rose 1.7% to 493.66 pence early Tuesday in London following the announcement. The stock is up 86% over the past 12 months. Copyright 2023 Alliance News Ltd. All Rights Reserved.
|
