Meggitt disappoints with predictions of lower growth
AEROSPACE supplier Meggitt has disappointed shareholders with an announcement that full year revenue growth is expected to be the low single figures.
The company, which has operations in Birmingham and Coventry, said in a statement covering the period July 1 to October 31, 2013 that underlying trading had been slightly below expectations. It has blamed short term production difficulties at Meggitt Sensing Systems and the timing of contract wins and project milestones in one of its energy businesses.
“As a result, and reflecting also the strengthening of sterling against the US dollar in the second half, the group now expects a 2013 revenue growth rate in the low single digits,” it said.
Separately, the group said it had also identified a raw material supply issue relating to one product type dating back to 2012. It said a solution was in place, including where necessary the replacement of the relevant parts over the next few years. However, the cost of this is uncertain and the group has been forced to set aside a £20m contingency to account for the expected implementation.
More encouragingly, it said civil aftermarket revenues had continued their gradual recovery, up 2% year on year in the third quarter and military revenues had remained flat despite sequestration.
“Civil aerospace end market indicators remain encouraging, with large jet original equipment deliveries at record levels and aircraft utilisation continuing to improve, underpinned by strong load factors across the industry,” it added.
“These indicators give us confidence in good future growth in civil revenues. The military outlook remains less certain due to the lack of visibility on sequestration in the USA. Prospects for the energy market remain very encouraging.”
