Global engineering group Meggitt PLC’s pretax-profits in the first half have seen a 20% dip. The company said this was on account of lower-than-expected revenues from its military division. This fall in profit has also spurred Meggitt to effect changes to the division’s full-year guidance.
The company’s chief executive, Stephen Young, said that Meggitt’s first-half performance saw a mix of lower-than-anticipated revenue from its military business and strong orders. He said that the group’s overall revenue was recorded as being lower on account of various factors such as currency fluctuations, an exceptionally high weighting in the second half, and disposals during this period. These factors, he said, impacted the company’s margins.
The company’s pretax profit for the six-month period ending June 30 amounted to US$165.29 million. Leaving out tax and exceptional items, the company’s profit during this period slid 21%, reaching GBP143.8 million.
The company, which is listed on the FTSE, did manage to declare an 8% higher dividend for this period, at 4.25 pence/share.
The company that has a well-established standing in the aerospace equipment industry, also said that it was in the process of revising its 12-month military guidance. The low-single digit slide will be revised to a mid-single digit fall, which will primarily be driven by reducing the higher-margin business of after-market services. With this, the company expects that its twelve-month organic revenue will witness growth in low-single digits.
In another development, Meggitt’s safety systems division has bagged contract from Boeing Company (BA) to produce and provide support services for the 737 MAX engine’s fire protection system. Meggitt did not disclose the financial terms of the deal.