Melrose Industries — The horizon remains positive

Melrose continues to build on its track record of delivering to expectations. Indeed the Engines division has achieved FY25 target returns a year early. This provides confidence in management’s new medium-term guidance (to FY29): a minimum EPS CAGR of 20% and acceleration to £600m of annual free cash flow, benefiting from the maturing of the risk and revenue sharing partnerships (RRSPs). With further potential from additional military spend not factored in, the shares offer interesting value.