Meggitt profit drops despite strong growth in all end markets

26th Feb 2019 08:54

(Sharecast News) - FTSE 250 engineering group Meggitt reported a drop in full-year pre-tax profit on Tuesday even as revenue rose amid strong growth in all end markets.In the year to 31 December 2018, statutory pre-tax profit declined to £216.1m from £228.3m the year before. This includes a £10.1m non-cash loss from the marking to market of financial instruments, principally currency hedges, the company said.Meanwhile, revenue was up 4% on a reported basis and 9% on an organic basis to £2.08bn and underlying operating profit increased 4% to £367.3m.Meggitt recommended a final dividend of 11.35p a share, taking the full-year dividend to 16.65p, up 5% on the previous year.The group said it remains confident of delivering its 2021 margin target of at least 19.9%, with the pace of its strategic initiatives continuing to accelerate as headwinds from unfavourable revenue mix are expected to ease as the rate of new aircraft deliveries slows in the early 2020s. Chief executive Tony Wood said: "2018 was a landmark year for Meggitt, with strong performance underpinned by our increased content on new aircraft programmes and growing end-markets, enabling the group to increase organic revenue growth to 9%, ahead of our raised guidance. Our team delivered good progress on our strategic initiatives offsetting extended learning curve costs that we incurred at our fast growing composites sites, enabling an increase in underlying operating profit to £367m."We have a clear growth strategy and remain focused on driving further improvements in customer and operating performance through our new customer-aligned organisation and the sustained deployment of the Meggitt Production System. Together with our growing installed base of 71,000 aircraft, we are well positioned to sustain growth over the medium term and to deliver our 2021 targets for underlying operating margin and cash."At 0850 GMT, the shares were down 3.9% to 543p.