Meggit shares tumble after it cuts revenue growth forecast - UPDATE

1st Nov 2013 12:28

- Shares fall 10 per cent- Full year revenue guidance lowered- Sets aside 20m pounds for supply issueMeggitt saw 10 per cent wiped off its market value after it lowered full year revenue guidance amid short-term production problems at one of its divisions.The FTSE 100 aerospace and defence manufacturer warned underlying trading in the last four months had been slightly below expectations and it now expected 2013 revenue growth rates to be in the "low single digits". It had given guidance of mid single digit revenue growth for the full year at its interims in August.It blamed short term production difficulties at its Meggitt Sensing Systems unit, which specialises in measuring physical parameters in the extreme environments of aircraft, space vehicles and oil and gas installations. It also said its performance was being hit by the timing of contract wins at one of its energy businesses and the stronger dollar.Meggitt had another dose of bad news for investors. It revealed it had also spotted "a raw material supply issue" and had put aside £20m to cover the expected cost of the matter.Looking further ahead the company said it continued to expected revenue growth to be in the mid-single digits in 2014.Investec analyst Chris Dyett admitted the update was "disappointing". He cut his profit forecasts for this year and next for Meggitt by 7%, downgraded his rating on the stock from add to hold and lowered his price target to 515p from 600p. Shares in Meggitt were down 10.3% at 514.5p at 12:27 on Friday. TB