Meggitt share price slides on lower revenue forecast
Shares in Meggitt plunged yesterday, after the British aerospace firm trimmed its full-year revenue guidance due to a weaker than expected performance from its military unit.
The FTSE 100-listed firm said that it now expected low-single-digit revenue growth this year, down from mid-single-digit growth. It is Meggitt’s second revenue downgrade in nine months.
Pre-tax profit for the first half of the year plunged 21 per cent to £143.8m, while revenue fell 11 per cent to £718.9m.
The company said revenues in its military business, which accounted for one third of sales, had fallen by 13 per cent, due to the winding down of programmes, the return of equipment from Afghanistan and delays to shipments.
“The outlook for defence expenditure in the US, our single most important military market, remains uncertain given troop withdrawals and a lack of clarity over equipment reset plans,” said the company.
It also said that a strong pound wiped £53m off revenues and was likely to continue to have an impact.
Shares plunged eight per cent in early trading, before recovering a little to close 4.7 per cent lower at 479.90p.
Meggitt, which supplies aircraft parts to planemakers Airbus and Boeing, said that the outlook for its civil aerospace markets “remains encouraging”, but said its energy business had suffered from credit problems with a partnering company in Brazil.
The firm raised its dividend by eight per cent to 4.25p per share.