Meggitt enjoys strong revenue growth ahead of 'challenging' period

Meggitt on Thursday reported "strong" first quarter revenue growth amid heightened demand for its products but warned of more challenging conditions for the remainder of the year.

The company, which specialises in manufacturing components and sub-systems for the aerospace, defence and energy markets, said it achieved organic growth of 9% in the first three months of the year, excluding the effects of foreign exchange and disposals.

"We continue to expect strong revenue growth in 2019, but are mindful of more challenging year on year comparators in the remaining three quarters, the potential for air traffic growth to moderate and the uneven nature of demand for defence products," said a company statement.

Civil aerospace revenue grew 7% on an organic basis, with original equipment revenue rising 9% as a result of continued strong demand on new generation aircraft.

Meanwhile, Defence revenue increased 18% organically due to strong demand for engine composites, brakes and training systems, while Energy revenue declined by 8% organically amid lower demand in the nuclear sector.

Consequently, the company is still expected to achieve an underlying operating margin growth of between 17.7% and 18.2% across the full year.

Alongside revenue growth, the FTSE 250-listed company said it has made "good progress" towards key strategic initiatives through the successful deployment of its new customer-aligned organisation, the sale of its non-core ignition business in France and initial construction of a state-of-the-art manufacturing facility at Ansty Park, UK.

"We remain focused on driving sustainable improvements in operational performance across the group, notably at our Engine Composites businesses where we expect elevated costs to continue during the first half to support a further step-up in production. We expect the investments we are making to drive progressive margin improvement throughout the second half," said Meggitt.

Meggitt's shares were unchanged at 524.20p at 0730 BST.