Meggitt downgrades profit forecast as defence arm continues to struggle

X The Business Desk

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Meggitt, the Ansty manufacturer of components for the power and aerospace industries, has downgraded its full-year profit guidance in the face of supply chain disruption.

The firm says it now expects revenue to be 5% lower than 2020 and that will make a profit of between £170m-£190m – it had previously forecasted that it would beat last year’s surplus of £190m. By comparison, the firm made a profit of almost £403m in 2019.

Meggitt posted its third quarter results this morning (October 28), saying that revenue as up 5% to the end of September, but that it Defence arm continued to struggled with turnover dropping by 12% during the period.

Tony Wood, Group CEO, said: “We are pleased to have delivered another period of sequential Group revenue improvement. Within this, the continued recovery in civil aerospace is encouraging with further positive signs emerging. However, the trends we saw during the first half in defence have continued in the third quarter.

“During the period, we have experienced the effects of the well documented global supply chain disruption. Thanks to the performance of our teams we have managed to partially mitigate this; but these headwinds, combined with lower defence revenue, have constrained Group profitability.

“While forecasting the pace and shape of the civil aftermarket recovery remains difficult, looking further ahead, our strong technology, leading market positions and diverse end market exposure underpin our confidence as the recovery in civil aerospace strengthens.”

Earlier this month, Meggitt’s £6.3bn sale to Parker-Hannifin was thrown into doubt after the Government announced it could intervene in the deal on national security grounds.