Coventry aerospace manufacturer says it is ‘well placed’ to recover

Engineering firm Meggitt says forecasting the trajectory of the civil aerospace industry will remain difficult, due to countries experiencing high infection rates and with travel restrictions in place.

In its full-year audited results, Meggitt says its acquisition by Parker-Hannifin of an all-cash offer of 800 pence a share, has been approved by shareholders, with the transaction expected to be complete in Q3 2022.

The firm which manufactures high-performance components and sub-systems for the aerospace, defence and selected energy markets say its revenue was 12% lower at £1,489m (2020: £1,684m) with a growth of 12% in H2 vs H1.

Although the market did improve towards the end of the year, it was faced with supply chain disruptions resulting in profit being 7% lower at £177m (2020: £191m).

There was a loss of £297m in statutory operating profit due to the prior year being impacted by non-cash impairment of intangible assets and other asset write-downs.

However, Meggitt says it had a good cash performance with free cash flow of £46m (2020: £32m) and net debt was in line with last year at £780m (2020: £773m).

CEO, Tony Wood said: “We delivered a robust performance in 2021, during which we adapted to challenging market conditions and finished the year with a good cash performance and increasing momentum, as shown by our encouraging order intake. Throughout this period the safety of our employees and delivering for our customers remained our priorities and I would like to thank all Meggitt employees for how they rose to the challenges posed by the effects of the pandemic and supply chain disruption.

“As we look ahead, and notwithstanding that the recovery in civil aerospace is likely to remain uneven in the short-term, the outlook and long-term fundamentals for our civil aerospace business remain positive. As a result of our successful strategy, the work we have done to position the Group and the proposed acquisition by Parker-Hannifin, I am confident about the prospects and opportunities that lie ahead for our employees and all our other stakeholders.”

Also reported is the progress made on the group’s key strategic initiatives. Meggitt has invested in operations at its new manufacturing centre at Ansty Park in Coventry and sites globally. It also says there has been good progress on the development of differentiated technologies enabling the transition to net-zero aviation and cleaner energy.

The group reports that it is well-placed to benefit from the recovery in civil aerospace and deliver long-term profitable growth.

Since the group is in an offer period under the UK Takeover Code, it is not providing financial guidance for 2022.