GKN takeover pushes Melrose deeper into the red

But the turnaround specialist hailed a "transformational year" for the group and said with costs of last year's GKN deal stripped out, underlying pre-tax profits surged to £703 million from £258 million the previous year.

GKN has a wheels and structures plant at the Hadley Castle Works in Telford as well as other factories dotted around the Midlands, with about 1,000 workers.

The results showed Melrose slumped to a pre-tax loss of £550 million in 2018, against losses of £28 million in 2017.

Revenues for the group, which also owns US air conditioning manufacturer Nortek, hit £8.6 billion, up from £2.1 billion in 2017.

Melrose said while it expects "wider macro challenges" to continue into 2019, it remains "confident of further success" in 2019.

Justin Dowley, chairman of Melrose, said: "This has been a transformational year for Melrose.

"The former GKN businesses are proving their potential to offer the outstanding opportunities we expected and much has already been achieved in the short period of ownership.

"Following the bid, we immediately set about initiating the changes we believe are necessary to unlock the full potential of the GKN businesses. These changes are already having a positive effect as shown in our 2018 preliminary results.

"We continue to see many opportunities to improve GKN and have found enthusiastic and energised employees within the GKN businesses who are keen on partnering with us to achieve these ambitions. While it is still early days, I would like to thank them all for their hard work already and we look forward to continuing to work with them to deliver the exciting opportunity before us.

"Although much of the public attention has been on the GKN businesses, we have continued to build and improve our existing businesses in 2018.

"Despite the current economically uncertain environment, we have every confidence that we will be able to continue to unlock the substantial shareholder value from the former GKN businesses and further improve Nortek."

The results came after Melrose took its first steps towards breaking up the former GKN business on Wednesday, with the sale of one of GKN's businesses that makes gearboxes for agricultural and mining vehicles, and offloading its minority stake in a Belgian aerospace supplier.

It hopes to complete the sale of Walterscheid Powertrain Group to American private firm One Equity Partners by the summer.

The FTSE 100 company said it would make £200 million from the stake and unit sales.

Melrose's takeover of GKN in 2018 drew intense union and political anger.

Its victory earlier last year brought to a close a bitter battle that had raged for months, with unions and MPs warning over job cuts, asset-stripping and national security concerns throughout the takeover saga.