Aerospace supplier reaches pivotal point in investment plans

Aerospace supplier Meggitt says it has a pivotal point in its ongoing investment plans and that 2017 should start to see the benefits of some of the outlay.

The stance came as the group, which has major operations in Coventry and Birmingham, revealed it full year results.

It said order intake grew by 22% last year reflecting foreign currency movements, the 2015 composites acquisitions and 3% organic growth. Strong organic growth, including multi-year orders, in the civil aerospace aftermarket and the military sector had helped offset declines in civil original equipment and a further decline in its energy division.

Reported group revenue was £1,992.4m (2015: £1,647.2m), an increase of 21%.

Underlying pre-tax profit was £352.1m (2015: £310.3m). The underlying tax rate increased to 23.5% (2015: 20.0%) and the group said this was reflection of the growth in the proportion of profit generated in the US following the two composites acquisitions completed in 2015, the strengthening of the US dollar and the absence of any significant one-off items during the year. Underlying earnings per share was 34.8p (2015: 31.6p).

Stephen Young, Chief Executive, said: “2016 trading was very much in line with our expectations and the stronger second half performance gives us good momentum going into 2017.
 
“We are past the peak of engineering investment on the many new aircraft programmes that have recently entered, or are entering, into service.  Our increased content on these new programmes will drive higher revenue in the coming years.
 
“We are now focusing our resources to accelerate progress on our key operational initiatives which we expect will deliver significant improvement in operating margin and cash conversion by 2021.”
 
He said a reflection of the group’s continuing confidence was the 5% increase in full year dividend to 15.1p.