Meggitt gives Birmingham a £118m boost with new aerospace order
AEROSPACE group Meggitt has boosted its new Birmingham-based operation with a major contract win worth almost £118.5m.
The company, which acquired Precision Micro last year, has been selected to provide a package of thermal management products for various LEAP engines. Meggott said the win builds on its growing relationship with Snecma (Safran) on the CFM56 engine.
Worth more than $175m (£118.49m) for the life of the programme – which covers original equipment, spares and repairs – the firm will produce components including fuel oil heat exchangers which perform at extremely high temperatures, helping to optimise engine efficiency and lowering fuel consumption.
Developed by CFM International (a 50:50 joint venture company between GE of the United States and Snecma of France), the LEAP engine will power the Airbus A320neo, Boeing 737MAX and the COMAC C919 aircraft.
Terry Twigger, Meggitt chief executive, said: “With Meggitt Sensing Systems’ sensor packages, also awarded for all three engine variants, these new contracts for Meggitt Control Systems further enhance our position on this important next generation engine.”
Produced at the Birmingham plant, the contract will be supported by Meggitt’s global aftermarket organisation.
The order coincides with the publication of Meggitt’s full year results which show for the year ended December 31, 2012 total revenues grew 10% to £1,605.8m (2011: £1,455.3m). Underlying operating profit for the year grew 10% to £394.3m (2011: £359.5m). Underlying pre-tax profit increased by 12% to £362.8m (2011: £323.0m). Underlying earnings per share increased by 13% to 36.2p.
The group said the energy market had been a major factor in the growth with business up 45% although all markets contributed to the strong performance.
“Our business grew strongly in 2012, with revenues up 10% and underlying earnings per share up 13%. PacSci is trading well and we are raising our synergy target again. Our operational improvement initiative is off to an excellent start. We look forward to further good growth in 2013 and beyond,” added Mr Twigger.
He said as a sign of the group’s continuing confidence the board was recommending an increase in the full-year dividend of 12%.
In outlook, it said civil markets remained positive, with further growth in aircraft deliveries anticipated in 2013 and beyond. Growth in commercial air traffic is expected to continue, and the link between traffic growth and aftermarket revenues is expected to normalise during the course of 2013, providing a positive outlook for civil aftermarket revenues.
“We therefore maintain our view that civil OE revenues will grow at an average of 7 to 8% and civil AM revenues at an average of 8 to 9% over the medium term,” it added.
