Investors agitate for shake-up at aerospace manufacturer

AEROSPACE manufacturer Meggitt could be headed for a major shake-up following reports activist hedge fund investors are unhappy with the performance of the business.

The Sunday Telegraph claimed hedge fund Elliott Management had met with Meggitt’s senior executives twice since it began building its stake in the business earlier this year.

The newspaper claimed Elliott, which has a 5.2% stake in the manufacturer, was actively seeking out support from other shareholders to push for the shake-up.

It is understood the investor is unhappy with the group’s recent performance; a situation which heightened following the release of Meggitt’s interims.

Although revenue was up 11% to £882.9m for the six months to June 30, 2016, statutory pre-tax profit declined 60% from £115.8m to £46.6m amid volatility in the aerospace and energy sectors.

In the past year the company – which has operations in Birmingham and Coventry – has looked to trim costs from its operation which has resulted in the closure of two sites and the loss of 400 jobs.

However, it said in outlook that the longer term picture looked more robust.

The Telegraph said Elliott had been active in various other sectors during the past few months, intervening in both the takeovers of brewer SABMiller and Black Country retailer Poundland.

In each case it forced the bidder – Anheuser-Busch InBev and Steinhoff – to increase their bids.

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