Meggitt First-Half Profit Falls on Lower Military Revenue

By Tapan Panchal

LONDON--Meggitt PLC (MGGT.LN) on Tuesday reported a 20% fall in first-half pretax profit due to weaker-than-expected revenue growth in its military division, and said that it has therefore decided to revise its full-year guidance for the division.

"Performance in the first-half was mixed, with very strong orders but weaker-than-expected military revenue," Chief Executive Stephen Young said.

"Group revenue was lower due to the well-trailed impacts of currency, disposals and an unusually high second-half weighting this year, which also impacted our margin," he added.

For the six months ended June 30, the company reported a pretax profit of 98.2 million pounds ($165.29 million), down from GBP122.4 million in the year ago period, on a revenue of GBP718.9 million and GBP810.1 million, respectively. Stripping out exceptional items and tax, profit for the period declined by 21% to GBP143.8 million.

The FTSE100-listed company has declared a 8% increased dividend for the period of 4.25 pence per share.

The aerospace equipment engineering company said that is revising its full-year military guidance to a mid-single digit decline from a low-single digit decline, driven by a reduction in the higher margin after-market businesses. It expects full-year total organic revenue growth to be in the low-single digits.

Meggitt separately said that its safety systems division has been awarded a contract by Boeing Company (BA) to manufacture and support the fire protection system for the 737 MAX engine and auxiliary power unit. It didn't disclose any financial details of the contract.

-Write to Tapan Panchal at [e-mail]

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