Meggitt's first-half profit falls on currency headwinds, disposals

5th Aug 2014 09:05

Engineer Meggitt reported a drop in first-half profit reflecting the impact of currency headwinds and disposals on revenue.Pre-tax profit fell 20% to £98.2m in the six months ended 30 June, as revenue dropped 11% to £718.9m. Orders rose 1% on a reported basis to £782.7m, driven by civil aerospace. On an organic basis orders climbed 9%.The company said revenue growth in civil aerospace was offset by the strength of sterling against the group's major reporting currencies of US dollar, Swiss franc and euro. Currency headlines contributed more than 6% to the decline of which £42.9m or 5% is attributable to sterling/US dollar. Disposals represented an additional net headwind of £14.8m, primarily from the 2013 sale of the Addison and Sunbank businesses. "Performance in the first half was mixed, with very strong orders but weaker than expected military revenue," said chief executive Stephen Young. "Orders growth of 9%, including 17% growth in civil aftermarket orders, gives us confidence in a good second half organic revenue and margin recovery, although currency will remain a drag."The dividend was raised 8% to 4.25p. RD