Meggitt lowers revenue guidance and flags supply issue

1st Nov 2013 07:05

- Full year revenue guidance lowered- Sets aside 20m pounds for supply issue- 2014 revenue guidance unchangedMeggitt had a double dose of bad news for investors as it lowered full year revenue guidance and alerted them of a supply hiccup that could cost 20m pounds.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 as well as the timing of contract wins and project milestones at one of its energy businesses. The strengthening of the US dollar hasn't helped either. It reported that civil aftermarket revenues were up 2% year-on-year in the third quarter while military revenues had remained flat.Looking further ahead the company said it continued to expected revenue growth to be in the mid-single digits in 2014.It said that separately it had spotted "a raw material supply issue" relating to one product type dating back to last year. It said it had a solution in place including where necessary replacing relevant parts over the next few years. "The cost of this issue is uncertain but we are providing £20m to account for the expected total financial exposure over the coming years," Meggitt said.TB