Rosebank’s 2025 audited results: adjusted profits up, leverage down, and a big US deal on the cards
Rosebank Industries has delivered its first meaningful set of numbers since acquiring Electrical Components International (ECI) in August 2025. On an adjusted basis, performance was ahead of expectations, ECI is already showing margin improvement, and net debt ended the year well below what the market had pencilled in. The company also confirmed it is in advanced talks to buy two US businesses for about $3.05 billion, funded by a fully underwritten equity raise of approximately £1.9 billion plus new debt.
Key numbers investors should know
| Metric (year to 31 Dec 2025) | Figure |
|---|---|
| Group statutory revenue | $445 million |
| Adjusted operating profit | $57 million |
| Adjusted diluted EPS | 17.8 cents |
| Statutory operating loss | $(46) million |
| Adjusting items (mainly deal and non-cash items) | $103 million |
| Net debt at year end | $494 million |
| Bank covenant leverage | 2.4x |
| Free cash flow after all costs | $(77) million |
| Adjusted free cash flow | $55 million |
ECI is doing the heavy lifting – and margins are moving up
ECI contributed around four months to the reported year, delivering revenue of $445 million and adjusted operating profit of $70 million – an adjusted margin of 15.6%. On an annualised, unaudited basis for 2025, ECI posted $1,219 million of revenue (down 4% year on year) and $188 million of adjusted operating profit (up 16%), taking the adjusted operating margin to 15.4% – up 2.6 percentage points. That is the sort of early trajectory Rosebank wants to see.
Divisional trends worth noting
- Electrification & Industrial (E&I): $195 million revenue during Rosebank’s ownership with a 22.0% adjusted operating margin, up 1.0 percentage point vs 2024. Demand tied to automation and data centres held up better than agricultural end-markets.
- Appliance & HVAC (A&H): $250 million revenue with a 16.4% adjusted operating margin, up 3.7 percentage points vs 2024. Residential markets stayed weak, but heavy commercial HVAC – including data centre cooling – was resilient.
- ECI Central: adjusted operating loss of $14 million (annualised: $40 million) – a clear focus area for the restructuring plan.
Restructuring is purposeful and quantified
Rosebank is part-way through a 24-month programme to reduce ECI’s sites by over a quarter, migrate production to lower cost facilities, simplify the operating model and cut central costs. Total cost is approximately $80 million and the expected uplift in adjusted operating profit is about $30 million, spread over the next two years. The duplicate St Louis head office has already been closed, and management has secured full recovery of US tariff costs from customers, which are now being invoiced and paid.
Cash, leverage and working capital: the de-risking story
Ending net debt of $494 million is the standout. It is “significantly lower than market expectations” even after unwinding costly working capital programmes inherited with ECI by more than $100 million. Specifically, customer factoring drawings were cut from $115 million to $7 million, and supplier finance exposure reduced to $16 million, with suppliers now bearing the cost.
Free cash flow after all costs was a $77 million outflow, driven by that planned unwind ($122 million) and $10 million of restructuring cash costs. Adjusted free cash flow (which strips out those items) was $55 million. On bank covenants, leverage sat at 2.4x at 31 December 2025, well below the first test threshold of 4.0x due on 30 June 2026. Liquidity also looks ample: a $900 million facility (term loan $400 million fully drawn; RCF $127 million drawn) left $373 million of headroom at year end.
To manage interest cost, the Group entered interest rate swaps in January 2026 at a weighted average fixed rate of approximately 3.41% (before margins). The average cost of debt over the next 12 months is expected to be about 6.0% (excluding arrangement fee amortisation).
Statutory loss explained: mostly deal and accounting noise
The Group reported a statutory operating loss of $46 million, but that includes $103 million of adjusting items, largely related to the ECI acquisition and non-cash effects:
- $55 million of acquisition and disposal costs (including an $11 million loss on a contingent hedge).
- $29 million amortisation of acquired intangibles.
- $23 million inventory fair-value unwind under IFRS 3.
- $12 million equity-settled incentive charges.
- $9 million restructuring costs.
- $25 million credit from derivative and FX movements.
In short, the adjusted picture is the cleaner read on underlying trading, which is why management – and the market – focus on it.
Outlook for 2026 and the margin ambition
Management says trading since year end keeps Rosebank on track to meet full-year expectations in 2026. The CEO reaffirmed confidence in hitting adjusted operating margins of at least 18% – driven by actions within management’s control. Given ECI’s annualised margin of 15.4% and the quantified $30 million uplift from restructuring, that target looks demanding but achievable if end-markets don’t roll over.
Potential $3.05 billion US acquisition: what it could mean
Rosebank is in advanced discussions to acquire two private-equity owned US businesses for a headline enterprise value of approximately $3.05 billion. Funding would be a fully underwritten equity issue of about £1.9 billion plus new debt facilities. Terms remain confidential, but the company says the deal aligns tightly with its “Buy, Improve, Sell” strategy.
Why it matters: if completed, this would be a transformational step-up in scale and deal with assets Rosebank believes it can improve operationally. The equity component is sizeable, so existing holders should expect dilution – the trade-off is a bigger, potentially higher-quality earnings base to drive returns over the medium term. Watch for valuation multiples, synergy targets, and leverage guidance if and when the deal is announced.
Dividend policy and main market move
No final dividend for 2025, as flagged. The Board has adopted a progressive dividend policy targeting c.3x cover on adjusted diluted EPS and expects to pay a first interim dividend after interim results in September 2026. The intended step-up to the London main market remains on track for Q2 2026.
What I like, what I’m watching
Positives
- Adjusted results ahead of expectations with improving margins at ECI.
- Net debt and leverage better than feared, despite unwinding expensive working capital schemes.
- Clear, costed restructuring with a quantified profit uplift and early execution progress.
- Tariff recoveries agreed and cash-collected – a quiet but important margin protector.
Watch-outs
- End-markets remain uneven, particularly residential appliances and parts of industrial – momentum needs to hold for that 18% margin target.
- Statutory losses will persist while acquisition accounting and restructuring flow through. That is optics more than economics, but it can spook screens.
- The potential $3.05 billion acquisition brings execution and integration risk, plus dilution from the proposed £1.9 billion equity raise.
Bottom line
Rosebank’s first year with ECI shows the model working as advertised: buy well, tighten operations fast, and aim for higher margins. Leverage is under control, cash conversion (adjusted for the deliberate unwind) is decent, and the restructuring benefits are quantified. If the mooted US deal lands on sensible terms, shareholders could own a much larger industrial platform with more self-help potential. Execution now is everything.
