Good morning and welcome to Rosebank's first half results. Here with me today are many members of the Rosebank team, including Liam and Matt, who are also here to answer your questions after the presentation is finished. It's been a very busy period for us with significant activity at ECI and the acquisitions of CPM and MW components. We are excited about the businesses we have and the potential to deliver very significant value for shareholders. We have moved rapidly to integrate our three businesses within the Rosebank structure, have agreed plans with the management teams, with the initial signs extremely promising. Also, I'm very pleased to report that the group is trading ahead of recently upgraded full-year expectations, and therefore we are raising estimates for the second time this year. As net debt has come in significantly lower than forecast, we're also upgrading our expectations for net debt. We have made bolt-on acquisitions in CPM with CFE and in MW and we are in advanced talks in ECI where the pipeline of opportunities is healthy. We see bolt-on acquisitions as an important value creation driver and are pleased to have executed on these acquisitions so quickly. The board has also declared our first interim dividend of 2.1 cents per share and the board is very happy to make this payment only two years since flotation. This very much aligns with our philosophy to reward shareholders as we generate cash and value through successful exits. In the second half and into 2027 our focus remains firmly on executing our plans for operational improvement and value creation. There is plenty of work to do and lots to be excited about. I now hand over to Matt to talk you through the financials.
Thanks, Simon. We've had a busy and productive first half of 2026 and achieved a strong set of first half results. This included a full period of trading for ECI, our first acquisition which completed in August last year, and only a short period of trading for CPM and MW components, with both of these acquisitions completing during May this year. Total revenue for the group was $733 million with adjusted operating profit of $110 million. Profit after tax was $74 million and diluted adjusted earnings per share for the group was $0.103 per share. As already mentioned by Simon, we have declared Rosebank's first interim dividend of $0.21 per share. We are pleased to be able to do this so quickly after flotation. The dividend will be paid in pounds sterling converted at the closing exchange rate at the close of business as of last night. We are building towards an earnings cover of three times adjusted earnings per share and our intention is to pay one third of the annual dividend following the interim results and two thirds following the full year results. On the right hand side of this slide we have included a reconciliation of the statutory operating loss made in the period of $34 million to the adjusted operating profit of $110 million which includes adjusting items of $144 million. The line items in the reconciliation will look familiar and include cash items relating to acquisition costs during the year of $54 million and restructuring costs of $38 million, as well as non-cash items primarily relating to the amortisation of intangible assets identified on acquisitions. We have taken fast and decisive actions in MW components and faster than anticipated actions in CPM to start to execute our business improvement promises. Plans are agreed across all three acquisitions and we are pleased to confirm that the improvement opportunities are at least as good as our original expectation. The group is trading ahead of recently upgraded full-year market expectations for 2026. In addition to the fast and decisive actions taken, we are continuing to see strong order intake at both CPM and MW components, giving us confidence to raise our profit guidance for the second time this year. With adjusted operating profit and EPS expected to be ahead of company-compiled analyst expectations. Turning to the results of the three businesses and starting with ECI. ECI achieved revenue of $591 million, adjusted operating profit of $95 million and adjusted operating margin of 16.1% in the period. Adjusted operating margin is up 100 basis points year on year, continuing the momentum towards the target of at least 18% adjusted operating margin in three to five years of our ownership. Revenue in ECI was down 4% in the period compared to the same period last year when it was not in the Rosemount Group. Deliberately exiting low margin business accounted for three percentage points of this decline. The higher margin electrification and industrial side of the business, which we highlighted at acquisition as being well positioned to benefit from high growth, achieved strong growth in the period with revenue up 9% year on year. This was driven by the performance in end markets such as data centres, which is growing strongly albeit from a low base, along with aerospace and specialty transportation, amongst others. We expect E&I to continue this level of growth in the second half. In contrast, the appliance and HVAC businesses revenue was down 13% in the period compared to last year, which included most of the deliberate business exits mentioned earlier. The performance of ANH was impacted by a slow start to the year in residential HVAC and by the now well-documented weakness in the North American appliance market. The appliance market is showing signs of stabilisation, but we are not anticipating any improvement in the second half. Whilst HVAC is showing some signs of recovery, meaning that we should see a better performance in the second half in this division. Our acquisition plans for the improvement of ECI are being delivered at speed, underpinning the continued margin progress we have made to date and expect to continue to see going forward, lifting ECI's adjusted operating margin from approximately 13% when we first identified the opportunity in the business to 16.1% today, less than one year into our ownership. MW Components achieved revenue of $55 million and adjusted operating profit of $14 million in our short period of ownership. Neither MW components or CPM were acquired at a financial month end, and were in the group for a very short period in the first half. Therefore, the results, including our ownership period, are not necessarily reflective of ongoing performance. Several of MW components and markets are enjoying good structural growth, which is showing up in strong order books, particularly in airspace and semiconductors and markets. Decisive and early business improvement plans are already starting to be delivered. CPM achieved revenue of $87 million and adjusted operating profit of $18 million in the short period of ownership. Aftermarket in particular is performing very well and revenue was up 7% in the full half-year period, including the time period that we did not own it. This was consistent with our expectations through diligence. Our business improvement plans are being implemented faster than we anticipated. Strong free cash flow generation from all three businesses, along with prudent assumptions made when acquiring CPM and MW components, contributed to group net debt of $1069 million, being significantly ahead of current market expectations for the half year, and has contributed to an upgrade to group net debt expectations for the full year. Adjusted operating profit of $110 million was converted into $113 million of adjusted free cash flow, with an inflow of working capital of $14 million, net capital expenditure of $14 million, and after adding back restructuring costs of $25 million. Net debt increased from $494 million at the end of last year to $1069 million at 30 June 2026, mainly as a result of the acquisition of CPM and MW components, which in total increased net debt by $639 million. Other movements in the period included $27 million paid for the acquisition of CFE, a bolt-on acquisition in CPM, $3 million in respect of FX and other non-cash movements, and free cash flow generation of $88 million being achieved after restructuring costs of $25 million. Group leverage was 2.4 times EBITDA at the end of the period. We are very pleased with the cash performance of the group and having made good progress in the first half, expect full year net debt and leverage to be ahead of current market expectations. Each of the three businesses are highly cash generative, which in the early years of ownership will fund the business's restructuring plans and the median term will reduce group net debt further. I will finish off with some financial guidance points for the group, which are included in an appendix at the back of the presentation. Rosebank corporate costs are expected to be approximately $30 million per annum in 2026 and going forward, growing with inflation, and the annual divisional LTIP charge approximately $20 million. In 2026, the LTIP charge guidance is $15 million because of the timing of the recent acquisitions. The income statement adjusted tax charge is expected to be approximately 26%, with cash tax slightly lower. The group's weighted average cash cost of gross debt is approximately 5.9%, in addition to a non-cash interest charge of approximately $20 million per annum. The non-cash interest charge guidance in 2026 is $15 million. Capital expenditure is guided to be approximately 1.3 times owned asset depreciation for the group, with owned asset depreciation just under $20 million in each of the three businesses. Cash restructuring spend includes a first phase of restructuring at ECI, spending $80 million in total by the end of 2027 and increasing profit over that period by $30 million in total. CPM and MW components are modelled to spend $100 million on restructuring over the first two and a half years of ownership with a payback period of less than three years. And finally, the number of shares in issue in the group is now £988.4 million, and the weighted average number of shares to be used to calculate full year earnings per share in 2026 is £856.1 million. With that, I will hand over to Liam to take us through the operating performance of the businesses in more detail.
Liam
Analyst — Operating Partner
Thanks, Matt. I'm very happy to be here to explain the excellent progress we are making with the three businesses we've acquired so far. We are executing at pace and are very confident in generating the returns we promise to shareholders over our three to five year holding period, namely at least doubling their investment through our buy, improve and sell playbook. I've been with the group now for seven months and I've been very impressed by the quality of each of our businesses, their strong diversified market positions and the quality of their management teams. Just to remind everyone what our three businesses do and our respective targets for margin expansion, ECI designs and manufactures electrical distribution systems, wire harnesses, control box assemblies and other engineered electrical components for a broad range of industrial and commercial applications. It operates a global manufacturing footprint and collaborates with its customers to provide integrated solutions for complex electrical systems. We completed the acquisition of ECI on the 19th of August 2025. Our thesis was to improve margins by 500 basis points from 13% to at least 18%. I am pleased to say that we're already halfway there after only 12 months of ownership. Our second business, MW Components, is a manufacturer of highly engineered metal components operating through three businesses, fasteners, springs and precision components. The business operates a US manufacturing footprint and supplies bespoke components used in mission-critical applications across a highly diversified range of industrial end markets. We completed the acquisition on the 28th of May this year. Our thesis is to increase the operating margin by 6-7 points from 15% to 21-22% and I'm pleased to say that we have already made significant progress. And finally, CPM is a business that manufactures highly engineered machinery and provides aftermarket solutions for oil seed processing and animal feed production. CPM operates a global manufacturing footprint with a strong focus on service-led solutions and aftermarket activities, supporting customers in demanding industrial environments. We completed the acquisition on the 12th of May this year. Our thesis is to increase the operating margin by six to seven points from 22% to 28% to 29% and we are already making excellent progress on that goal. Turning to ECI, you will already be familiar with our five-point plan for improving ECI and we are making good progress on achieving each of those aims. We've seen a good improvement in operating profit and the associated margin improvement moving from 12.8% in 2024, 15.4% in 2025 and now 16.1% in the first half of 2026. We have made a strong start on the initial 24-month restructuring programme, including reducing central costs, closing the St. Louis head office and reducing the number of sites by over a quarter. We have exited some business which was too low margin and completed the exit of costly customer factoring and supplier finance arrangements, which were a drag on our cash flow and profitability. We have materially reduced the burden of debt, which frees up significant cash flow, which we are now using for reinvestment where needed. We have successfully passed through all tariffs as we said we would at the time of acquisition, and we continue to pursue an active pipeline of bolt-on acquisitions. Turning to MW components, at the time of acquisition, we introduced our six-point plan for improving MW components, which you can see here on the left-hand side. We have now completed the legal restructure of MW components into three standalone businesses, fasteners, springs and precision components, in line with the management structure. We have closed the head office, which will save at least $15 million on an annual basis. We've approved $40 million of capex for the fasteners facility in Addison, which will drive efficiency and progress towards the target of at least 15% operating margin at that site compared to a small loss currently. We've also announced three factory closures and identified further optimisation opportunities and we have materially reduced the business's debt burden freeing up significant cash flow and enabling further investment. Finally we're pursuing a pipeline of bolt-on acquisitions with one already agreed for precision components we expect to close in Q3. Turning now to CPM, at the time of acquisition we introduced our five-point plan for improving CPM which is again set out here on the left. We have completed the initial phase of restructuring head office and divisional costs resulting in 10 million dollars of annualized savings and we've recruited a new CEO who will start on the 1st of October. We have put plans in place to simplify the organization including moving all aftermarket activities under a unified leadership structure. Eliminating the non-core process solutions division, including the potential disposal of a subdivision, multiple site consolidations and merging the remaining businesses into the industrial solutions division. And we have multiple site consolidations underway. As we did with ECI and MW components, we have significantly reduced CPM's debt burden, freeing up cash flow and enabling further investment. Finally, we are actively building a pipeline of bolt-on acquisitions for the aftermarket business with one completed already CFE the distributor in UK and Ireland. To conclude the group is performing ahead of our expectations with our promises of business improvement and value creation being delivered across all three of our businesses. We are very excited about the outlook for Rosebank. We are confident that we will outperform recently upgraded profit expectations for full year 2026. The group's first acquisition, ECI, is showing continued margin progress with the initial 24-month restructuring programme progressing well. We completed the acquisition of MW components and CPM in the period. Both businesses are performing well and the opportunity for improvement is at least as good as we expected pre-acquisition. All three businesses are showing strong underlying cash flows, continued margin opportunity and a clear path to doubling shareholders investment in three to five years, based upon our typically conservative assumptions.
