Melrose expects to return 200 million sterling to shareholders next year

By Esha Vaish (Reuters) - Engineering turnaround specialist Melrose Industries Plc said it expected to return about 200 million pounds to shareholders next year, days after it sold a division that makes ropes used in mines. Melrose, which follows a buy-improve-sell strategy akin to private equity firms, completed the sale of its Bridon division last week to the Ontario Teachers' Pension Plan for 365 million pounds. Melrose bought Bridon for about 150 million pounds in 2008. The division is the only one Melrose has sold so far this year. The company sold five units for a total of 945 million pounds in the year ended June and returned about 600 million pounds in cash to shareholders in the form of a dividend or a capital return. Melrose also announced a reverse stock split of 11 for 13. Melrose expects its board to recommend early next year a return of capital to shareholders using the same model, the company said on Wednesday. Analysts have been expecting Melrose to sell part of its Elster portfolio - the water, gas and power consumption meter businesses it bought in 2012 for 1.8 billion pounds. The company told Reuters in July that Elster Water could be the first to be sold from the portfolio, but Finance Director Geoff Martin said on Wednesday Melrose was not ready to part with the unit yet. "(The huge margin improvement at Elster Water) naturally means that sooner rather than later, we may be ready to sell it, but not yet because we want these results to continue for a while longer," Martin told Reuters. "Maybe next year sometime, but no promises." Melrose shares were down 0.7 percent at 260 pence on the London Stock Exchange at 1010 GMT. (Editing by Robin Paxton and Kirti Pandey)