Published by Global Banking & Finance Review®
Posted on February 27, 2026
2 min readLast updated: April 2, 2026
Add as preferred source on GoogleMelrose warns of weaker 2026 revenue (£3.75–3.95 bn vs est. £4.01 bn) due to supply‑chain and tariff risks, despite strong 2025 results and defense demand hindering stock performance.
By Aatrayee Chatterjee
Feb 27 (Reuters) - Melrose Industries on Friday forecast softer-than-expected 2026 revenue due to sector-wide supply chain constraints and tariff uncertainties, overshadowing strong 2025 results and sending its shares down as much as 13.5%.
Shares in the owner of GKN Aerospace were the biggest fallers on Britain's blue-chip FTSE-100 index.
CEO Peter Dilnot told Reuters that demand across civil and defence aerospace remained exceptionally strong but warned that bottlenecks at major manufacturers such as Airbus, Pratt & Whitney and GE were the key risk to meeting that demand.
"The supply chain remains fragile and is yet to recover to pre-COVID levels, with the operational environment expected to remain complex and dynamic in 2026," the company said.
SHIFTING TARIFFS
Melrose's results come as uncertainty over U.S. trade policy intensifies, with Washington starting to collect a temporary 10% global import tariff while the administration works to raise the rate to 15%.
The shifting tariff landscape has left companies weighing the impact of short-term duties and the prospect of refunds after the U.S. Supreme Court struck down an earlier programme.
Dilnot said Melrose had largely mitigated the impact of changing U.S. tariffs, noting that defence work and operations covered under the U.S.-Mexico-Canada trade deal were exempt, while remaining exposure had been managed through contracts and agreements with suppliers and customers.
The London-listed company expects 2026 revenue of 3.75 billion pounds to 3.95 billion pounds ($5.05 billion-$5.32 billion), below analysts' estimate of 4.01 billion pounds, according to data compiled by LSEG.
The company also expects annual adjusted operating profit between 700 million and 750 million pounds.
For 2025, it posted an 8% rise in revenue to 3.59 billion pounds and a 23% increase in adjusted operating profit to 647 million pounds, lifted by solid aftermarket demand and higher defence spending driven by geopolitical tensions.
($1 = 0.7424 pounds)
(Reporting by Aatrayee Chatterjee in Bengaluru. Editing by Sonia Cheema and Mark Potter)
Because supply‑chain bottlenecks at OEMs like Airbus, Pratt & Whitney and GE, along with tariff uncertainties, are constraining production and revenue growth.
Melrose delivered strong 2025 results with revenue rising ~8% to £3.59 bn and adjusted operating profit up ~23% to £647 m.
The company mitigated tariff impact through defense work and trade‑deal exemptions (e.g., US‑Mexico‑Canada agreement), alongside contractual arrangements.
Melrose introduced a new £175 m share buyback through March 2027 and increased its dividend, following completion of its prior buyback.
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