Meggitt profits crash 11% but return to growth expected in 2015
Updated : 09:10
Revenues fell 5% and profits 11% at Meggitt last year but the FTSE 100 aerospace parts supplier expects to return to growth in 2015 as its military market becomes more benign.
2014 saw group revenue decline 5% to £1.55bn, mostly from currency headwinds, though organic growth was still marginally negative as organic revenue growth of 6% in civil aerospace was offset by declines in military and energy.
Underlying profit before tax fell 13% to £328.7m, but even ignoring the impact of currencies, disposals or acquisitions there was still a 11% fall, with underlying earnings per share down 14% to 32.4p.
The final dividend has been hiked 8% to 9.50p, resulting in full-year dividend rising 8% to 13.75p.
Chief executive Stephen Young said the group expected organic revenue growth in 2015 of low to mid‑single digit percentage points, in line with guidance given in November.
The group expects civil aftermarket growth in mid-single digits for 2015, though growth in large jet deliveries is expected to below the long‑term trend rate of traffic growth in the next year or so.
In military, Young said the market looked "to be entering a more benign phase with military budgets seeing lower rates of decline than in recent years and even some suggestion of growth in the all-important US budget from 2016", with President Barak Obama's recent budget requesting an 8% increase.
However, management have cautously continued to expect an average of 2% growth per annum excluding the effects of possible US budget sequestration for 2016.
The energy businesses, driven by heightened demand for printed circuit heat exchangers and increasing market share in condition-monitoring equipment, should continue to deliver revenue growth averaging greater than 10% over the medium term.
"However, in 2015 we expect good organic growth in energy control valves and condition monitoring will be largely offset by a decline at Heatric reflecting the impact of capital expenditure deferrals by our major oil and gas customers."