Meggitt remains in line with expectations, appoints new COO

The FTSE 250 firm said third quarter revenue growth of 6% on an organic basis - excluding effects of mergers and acquisitions, and foreign exchange - was consistent with the previously announced expectation of a greater second half weighting of organic revenue and earnings than in 2015.

On a reported basis, revenue grew by 28%, including the effects of M&A and foreign exchange.

Civil aerospace revenue grew 9% organically, within which aftermarket revenue growth was 8%.

Meggitt’s board said the military division grew 6% whilst the continued end-market challenges in energy resulted in an organic revenue decline of 8% for the period.

Results in the third quarter benefited from five more trading days than the same period during the prior year, but the board did warn that as a result the fourth quarter will be five trading days shorter than in 2015.

The group said it expects to achieve low single digit organic revenue growth for the year, consistent with previous guidance and even after taking into account recently announced delays to key civil platforms.

Further to the two site closures announced earlier this year, additional rationalisation of Meggitt’s footprint is underway with the consolidation of its Louisville, US and Kassel, Germany MRO facilities into existing regional hubs.

At the same time, Meggitt announced the appointment of Tony Wood as chief operating officer with effect from 1 December 2016.

Wood, who was most recently president, aerospace at Rolls-Royce, is being appointed to the board as an executive director.

He will report to chief executive Stephen Young with specific focus on accelerating the operational performance of the group.

“Current trading is in line with our expectations and, having increased shipset content on key growth platforms, we are confident that we are well positioned to deliver organic revenue growth ahead of our end markets over the medium term,” Young said.

“We continue to make positive progress on our key strategic initiatives, most notably the Meggitt Production System and the new Customer Support and Services organisation, which is now fully operational.”

Young added that he was delighted to welcome Tony Wood to Meggitt.

“His extensive industry experience and track record of successfully managing complex operations, including aftermarket businesses, will be invaluable as we focus on accelerating our strategic initiatives and delivering further operational efficiencies to drive long term shareholder returns.”