Rosebank Industries said in an update on Monday that it remains highly confident of meeting full-year expectations after a solid start to its ownership of Electrical Components International, reporting stronger margins, progress on restructuring and lower-than-expected net debt.
The group acquired ECI on 19 August, with its trading update covering 10 weeks of trading under Rosebank's control.
It said ECI's performance had been in line with expectations and that a series of planned actions were already under way, forming what it described as the foundation for delivering its targeted shareholder returns.
Those included agreeing a strategic plan with ECI's management, initiating a 24-month restructuring programme that would reduce the number of sites by more than a quarter, and setting out measures to cut central costs, including closing ECI's duplicate head office in St Louis this month.
The restructuring would cost about $80m and is expected to lift adjusted operating profit by around $30m over two years.
Rosebank had appointed a new finance director at ECI, Diego Laurent, and confirmed that leverage had been reduced to roughly 2.5 times EBITDA, a move it said had been well received by customers and suppliers and should support better trading terms.
It had also exited more than $100m of working capital customer factoring and supplier finance arrangements, recovered all tariffs incurred, and begun evaluating bolt-on acquisition opportunities for ECI in North America.
A full review of the acquired balance sheet had revealed "no surprises", and the planned move to the main market remains on track for the second quarter of next year.
ECI's trading performance showed steady revenue and a significant improvement in profitability.
Adjusted operating margin for the period was 15.7%, up 2.2 percentage points on the same period last year and ahead of the 15.1% margin reported in the first half.
Electrification and industrial revenue was flat, with construction, agriculture and transport markets still subdued, though divisional margin rose 1.9 percentage points.
Appliance and HVAC revenue increased 2%, with a 3-percentage-point rise in margin.
Net new business wins were significantly higher than a year earlier.
Rosebank said it expected year-end net debt to come in below market forecasts of $550m, with leverage steady at about 2.5 times adjusted EBITDA.
The company reiterated it was "highly confident" of meeting 2025 expectations and said ongoing improvement plans should support further margin progress through 2026.
"As promised, a lot has been achieved in the first few weeks of our ownership of ECI," said chief executive Simon Peckham.
"We have an agreed plan with ECI management to deliver on our promised shareholder returns, to double their investment in three to five years, and are confident in achieving it.
"We are now also looking into a number of other opportunities."
At 1000 GMT, shares in Rosebank Industries were up 1.1% at 346.76p.
Reporting by Josh White for Sharecast.com.