Meggitt predicts growth to continue in 2011
AEROSPACE group Meggitt said today it had seen a strong start to 2011 and based on current market indicators and at constant exchange rates, expected to deliver good organic growth in the year in line with expectations.
In an AGM statement, group chairman Sir Colin Terry said the company, which includes Coventry-based Meggitt Aircraft Braking Systems (MABS), was well positioned for the long term.
He said that when the group published its Preliminary Results last month, it had said that good momentum from the second half of 2010 had been carried forward to 2011 and this had been reflected in a Q1 performance which saw order intake up by 15% and revenues up by 12%, both at constant exchange rates, compared with Q1 last year.
“Within the period we saw double digit revenue growth in all market segments, with the training business contributing strongly to the military growth and energy continuing to progress well. This gives us confidence that trading will continue in line with our expectations,” he said.
He said the financial position of the group had changed during the period as a result of two actions. Firstly, in January it announced the proposed acquisition of Pacific Scientific Aerospace (PSA) and a related placing of 69.8m shares in the group, which raised £246m net of costs. The balance of the purchase price is being funded through existing debt facilities.
Secondly, it has completed the refinancing of its 2007 banking facility which was due to expire in March 2012. As a result of cash generation, the group has reduced the size of the facility from $920m (£564m) to $700m (£429m).
“The PSA acquisition brings us complementary capabilities in fire suppression, electric power generation and management as well as enhancing our portfolio of sensors and providing expected synergies of $18m per annum by 2014,” he said.
“The consideration of $685m (to be adjusted for working capital) represents a multiple of 8.7 times 2010 EBITDA, or 7.9 times after taking account of the estimated value of a tax cash benefit arising from the transaction. All necessary regulatory approvals have been received and the purchase of PSA is expected to complete around the end of April this year.”
