Melrose Industries has issued a profit warning following an incident involving a chemical tank at its Garden Grove facility in California. The engineering firm expects to incur a financial impact ranging from £25 million to £30 million in the second half of the year as a result of the event, which occurred in May.

The tank overheated, prompting an emergency response and leading to operational disruptions. In addition to the direct costs associated with addressing the incident, Melrose cited reduced production capacity as a significant factor contributing to the anticipated profit shortfall.

In response to the situation, Melrose has temporarily suspended its £175 million share buyback programme. The company did not provide a specific timeline for resuming the programme but indicated that the suspension is a precautionary measure while it manages the consequences of the incident and its effect on overall performance.

The incident underscores the challenges faced by manufacturing and engineering firms in maintaining continuous operations amid safety and technical risks. Melrose’s financial outlook reflects these pressures as it navigates the impact on its facilities in California.