Meggit flies higher on back of demand

Meggitt, which supplies flight displays and wheels to planemakers Airbus and Boeing, on reported an underlying pretax profit of £146.2, ahead of analysts’ £135m consensus forecast, on revenues 18 per cent higher at £649.8m for the six months to the end of June.

Its civil aerospace unit, which accounts for 45 per cent of group revenue, saw sales grow 18 per cent to £267.2m.

Meggitt’s chief executive Terry Twigger said: “A good chunk of the civil growth is to do with the production of new aircraft but we also expect to see a recovery in the business and regional jet market so we expect equipment deliveries to rise in the next couple of years.

“That growth is underpinned by a very nice recovery in the civil aftermarket – sales of spares and repairs – too.”

Commercial aircraft demand is picking up as air travel recovers and funds return to the leasing market. Soaring oil prices, meanwhile, are forcing airlines to renew fleets with more fuel-efficient planes. As such, Boeing and Airbus have both increased production rates in recent months.

Bournemouth-based Meggitt said that it expected revenues from civil aerospace equipment to grow by up to eight per cent a year until 2015, helped by strong growth in business jets and programmes on large aircraft, including the Boeing 787, Airbus’ A350 and Bombardier CSeries.

Bank of America Merrill Lynch analyst Celine Fornaro, who rates the stock a “buy”, said: “We think Meggitt’s management is executing very well, both capturing the end-market growth and also focussing on continuous restructuring.”

Meggitt raised interim dividend 12 per cent to 3.20p per share.

On Monday British aero engineer Senior posted a 17 per cent rise in first-half profit, helped by Airbus and Boeing stepping up production.