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.
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Hide AdMeggitt’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.
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Hide AdBank 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.