Aerospace supplier Meggitt expects organic growth to return later this year

Aerospace group Meggitt has said trading in the first quarter has been in line with expectations as it looks to the second of the year to generate the majority of its annual revenues.

The group, which has operations in Coventry and Birmingham, said Q1 reported revenue grew 9%, boosted by the effects of foreign exchange and the disposal of Meggitt Target Systems.

However, on an organic basis, revenue declined by 1%, which the group said was consistent with its forecasts that revenue and earnings would be weighted towards H2.

Civil aerospace revenue grew 3% organically during the quarter. Original equipment revenues grew 3%, with strong growth in large jets partly offset by continued softness in business jet and civil rotorcraft markets. Organic aftermarket revenues also grew 3%, with good growth in business jets but lower demand for regional jet spares.

Military revenues declined by 5% organically with the Continuing Resolution in the US affecting demand in the quarter, despite the positive outlook for medium-term budget growth.

During the first quarter, Meggitt completed the acquisition of Miami-based Elite Aerospace, a leader in the test, repair and overhaul of heat transfer, pneumatic, hydraulic and avionic components for both commercial and military aircraft. The acquisition of Elite, which generated revenue of £14m in 2016, are set to provide increased market access for the group’s Customer Services & Support (CSS) organisation, as well as broaden the range of its services.

“Looking forward, the group continues to expect 2-4% organic revenue growth for the year, in line with guidance issued with the 2016 full-year results in February,” it said in an AGM statement.

“We continue to make good progress on our key strategic initiatives.”