Melrose co-founder eyes up London-listed firms with ‘2.0’ aerospace venture
The recently-departed former chief of aerospace firm Melrose Industries is preparing to launch a new investment vehicle and is eyeing up undervalued targets on the London Stock Exchange.
Simon Peckham, who told the Sunday Times this past week that work is his hobby, is laying the groundwork for Melvest; a new venture born of the mantra of “buy, improve, sell”, the strategy he employed while leading FTSE 100-listed Melrose Industries.
“I’ve been quoted before: I don’t play golf, I’m one of those sad people whose work is their hobby, it’s what I love doing,” he said.
Over his 12 years at the helm of Melrose Industries, Peckham grew the firm into a £7bn aerospace powerhouse and expanded his personal coffers to multi-millionaire proportions as a result.
The company reportedly boasted a 3,039 per cent shareholder return rate from 2005 to the present day and Peckham said Melvest will be built on the same operating mission.
However, he explained that the firm will not just look at under-performing companies with an eye to improving them, but also under-valued ones, which he sees in plentiful supply on the London stock market.
“The UK stock market is in danger of being ordinary,” he said.
“If you have a large stock market, but you don’t have home investors, it’s going to have consequences… There’s a core domestic market of companies that are looking for foreign capital but cannot access it.”
However, the Melrose co-founder said he would want the company, which will start with just four employees, to be listed in London should it follow that trajectory, he said.
“It’s like going back 20 years and it’s a lot of fun. I can’t wait to get going,” he said.
According to its 2023 filings posted last month, which also confirmed Peckham’s departure, statutory losses before tax at the FTSE 100-listed Melrose narrowed from £328m in 2022 to £8m in 2023 while operating profit grew from a £270m loss to a £57m profit.
The aerospace division’s operating profit grew from a £134m loss to a £17m profit after the company pivoted its strategy to a “pureplay” aerospace business and demerged the GKN Automotive, GKN Powder Metallurgy and GKN Hydrogen divisions from Melrose into Dowlais Group on 20th April 2023.
Former chief operating officer Peter Dilnot has replaced Peckham at the top of the company, having served five years in his previous post.