GKN Aerospace owner Melrose Industries has swung to a first half profit thanks to a boost from rising demand in the defence and airlines sector.

The group shrugged off disruption sparked by US President Donald Trump’s trade war to post pre-tax profits of £379 million for the six months to June 30, against losses of £105 million a year ago.

On an underlying basis, profits rose 24% to £248 million, while earnings lifted 29% to £310 million.

Chief executive Peter Dilnot said the performance came against a “backdrop of supply chain and tariff disruptions”, which led to the firm reviewing supply chains and pricing.

Shares in the FTSE 100 listed group lifted nearly 7% in morning trading on Friday as the underlying earnings came in higher than forecast.

Melrose makes engine parts for jet fighters and military helicopters, as well as civil aircraft, and provides a range of technology for flights.

Mr Dilnot said: “Our multi-year transformation programme will be completed by year end and the benefits are already reading through with more to come.

“We have a clear strategy underpinned by attractive aerospace and defence markets, differentiated technology and established positions on the world’s leading civil and defence aircraft.”

He added the group was “confident about delivering sustained increases in profit and cash flow in the years ahead”.

Melrose kept its full year guidance unchanged on a constant currency basis, but the stronger pound against the US dollar saw it trim forecasts on a reported basis.

It now expects reported underlying operating profits of between £620 million to £650 million, against the £650 million to £690 million previously pencilled in.

Guidance for reported revenues was trimmed to between £3.43 billion and £3.58 billion, from the previous range of £3.55 billion to £3.7 billion.

But the guidance does not include any direct or indirect impact of tariffs.

Melrose has taken action to offset the impact of trade tariffs by adjusting its supply chain, negotiating with customers and suppliers, and the use of so-called drawback, which involves reclaiming taxes on imported goods that are later exported.

It said: “The industry continues to navigate the impact of these new trade restrictions which have put pressure on supply lines and customer deliveries.

“In response, we took immediate action to assess their impact and as a result of working closely with our partners and customers, have actioned a plan to successfully mitigate our identified direct exposure.

“Here, our global footprint provides us with excellent operational agility including the ability to rebalance production quickly and efficiently.”

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