Melrose slashes GKN pension blackhole, returns to dividends

MELROSE, the industrial buy out and shake-up giant, today returned to dividend payments even amid a turbulent period for the aerospace sector.

It is turning around car and planes part maker GKN and selling off Nortek Air Management after bouncing back from a more than £500 million loss in 2019.

For 2020, it was in the black to the tune of £120 million, allowing for a 0.75p a share divi, worth £35 million. That is almost twice the £18 million Melrose took in furlough money from the government, now repaid.

A billion pound pension black hole at GKN is being filled. Thanks to Melrose cash injections and stock market rises, that deficit is now down to £300 million. That is good news for the 30,000 in the GKN scheme.

Chief executive Simon Peckham said: “We have looked after the pensioners, now we are going to look after the shareholders.”

Peckham welcomed the Super Deduction scheme in yesterday’s budget which gives a generous tax break to big companies investing in infrastructure.

Peckham said it is too soon to know if Melrose would take advantage, but said: “As a general comment it is a great plan.”

The sales of Nortek’s air management business was delayed by the pandemic. It could still fetch up to $3.5 billion though, the City expects.

Melrose shares rose 3p to 180p, leaving it valued at towards £9 billion.

Chairman Justin Dowley added: “Whilst the COVID-19 crisis has had a major detrimental effect this year, Melrose has generated record cash flows and continued to invest to improve our businesses.”