Uneven rollout of vaccines globally weighing on forecasts, Meggitt says

Meggitt continued to forecast a recovery in its main end markets, but noted the recent softening in full-year industry traffics forecasts due to the uneven rollout of vaccines across the globe.

"Additional waves of COVID-19 infections in some countries, coupled with the uneven nature of vaccination rates globally, has also led to a slight softening in expectations of the extent of the recovery in the second half and industry traffic forecasts for the full year," the company noted.

Critically, the company continued to anticipate a "progressive" recovery in civil aerospace over the course of the third and fourth quarters.

Even so, activity in the civil aerospace end-market remained "weak" during the quarter, Meggitt said.

The aerospace and defence components and sub-systems engineer said first quarter group revenues fell 29% on the year before, although that was better than the 35% drop seen in the last three months of 2020.

Revenues per passenger kilometres in the airline sector were down by 72.2% and 74.7% versus the year before in January and February, respectively.

Original equipment and aftermarket sales in civil aerospace were especially weak, falling 46%, while sales in the business jets division were down by only 24%.

Defence outlays in its core US market on the other hand were "solid" and the Department of Defense's 2022 budget proposal included a 1.7% rise.

Revenues from Defence were down 10% against the period of 2020, when they jumped by 15%.

Conditions in energy markets meanwhile were described as stable, with sales flat thanks to "good" levels of capital expenditure.

The company described its cash performance as better-than-expected but said that lower productivity at two of its earlier stage MPS sites in the US dampened profitability, which was nevertheless in line with management's expectations.

In terms of the financial outlook, Meggitt projected sales would be be broadly in line with 2020, but with underlying profit ahead on the year before and free cash flow positive.

As of 1143 BST, shares of Meggitt were off by 2.02% to 456.4p.