Shares in Rosebank Industries (LON:ROSE) rallied after the acquisition vehicle upgraded FY26 guidance and issued a confident FY27 outlook.
The FTSE 250 company operates a ‘Buy, Improve, Sell’ model. Rosebank highlighted improving performances at all three of its acquired businesses. MW Components, which makes fasteners, springs and precision metal components, was the main driver of the upgrade.
Forecast-beating performance
Rosebank said it expects FY26 adjusted operating profit and earnings per share (EPS) to be ahead of the company-compiled consensus. Before today, analysts were calling for adjusted operating profits of $294 million, rising to $452 million in FY27.
‘Encouragingly, the strong trading performance being seen in all three MW Components businesses and the recent strong order intake seen in CPM gives us confidence that the group will continue to outperform into 2027,’ insisted Rosebank.
MW drives the upgrade
The company highlighted positive performances from CPM and MW Components following their acquisitions in May 2026.
US-based MW Components is expected to beat FY26 market expectations thanks to cost actions, with all three divisions ahead of pre-acquisition expectations.
CPM is a leader in engineered processing equipment used in oilseed, animal feed production, renewable energy and industrial materials. Rosebank said CPM is on track to meet market expectations for 2026. A new CEO has been recruited and there are further self-help benefits to come.
Rosebank’s maiden acquisition was ECI, a US electrical components maker bought in 2025. While H1 revenue was 4% lower year-on-year, this reflected a deliberate exit from low margin revenue and ‘improvement plans announced last year are being accelerated’.
What did the CEO say?
CEO Simon Peckham said: ‘All three of our businesses are improving their performance as a result of actions taken since their acquisition. Whilst we have had to cope with well understood headwinds in the appliance business of ECI, we are confident in our plans for each of the three businesses and look forward to the months to come.’
When Rosebank floated in 2024, investors hoped the company was ‘the new Melrose’, back when Melrose (MRO) ran a similar ‘Buy, Improve, Sell’ model. Most of the senior management including Peckham actually came from Melrose, which helped its reputation.
After a stuttering start, Rosebank is starting to live up to the hype. We think the company is a compelling self-help story. However, investors should be aware that future capital raises to fund acquisitions will result in dilution.
Barclays, which has a 475p price target for the stock, believes this is the start of an upgrade cycle. The broker has raised its FY26 and FY27 operating profit forecasts to $315 million and $468 million respectively.
Following the update, Citi retained its ‘buy’ rating on Rosebank. ‘With shares having given back all gains since March, we’d see the H1 trading statement as encouraging, with a recovery potential greater than the implied low single digit percentage increase in consensus’.
Citi added: ‘With trading ahead of expectations and a strong track record on improving acquired businesses, we see attractive returns and retain our Buy rating.’
Read the press release here: https://www.rosebankindustries.com/investors/
Disclaimer: The author James Crux has a personal interest in Rosebank Industries.
