US defence spending a concern at Meggitt

6th Mar 2012 07:11

Meggitt, the engineering company focused on the aerospace, defence and energy markets, saw strong growth across all of its markets in 2011.Revenue in 2011 rose by a quarter to £1,455.3m from £1,162.0m in 2010, and roughly in line with market expectations of £1,458.7m. The company said it continues to expect organic revenue growth of 6 to 7% on average over the next five years.Adjusted profit before tax was comfortably ahead of expectations of £290.2m at £323.0m, up 26% on 2010's £256.1m.Earnings per share rose 15% to 31.9p from 27.8p the year before. Analysts following the company had expected earnings per share of 31.0p.The full year dividend has been bumped up 14% to 10.5p (consensus: 9.98p) from 9.20p.Chief Executive Terry Twigger said: "Our business grew strongly in 2011 across all market segments and good organic growth was augmented by the acquisition of Pacific Scientific Aerospace, which is very complementary to our existing business and trading in line with expectations. We look forward to further good growth in 2012 and beyond."The group added that it expects the military market will see growth of around 2% per annum over the medium term, in line with previous guidance, assuming no material cuts to programmes are made. The firm warned investors that the outlook for defence expenditure in the US, its single most important military market, continues to be challenging in the medium term, given the requirement for the administration to reduce the fiscal deficit. In Energy, revenues increased by 34% in 2011, with organic growth of 28%, while other markets delivered a solid 5% organic growth, with laboratory test equipment and products for the space market performing particularly well. Civil aerospace grew 15% organically, with the recovery which started in the second half of 2010 continuing into 2011. Growth in civil OE across all aircraft categories remained very strong throughout the year, with the civil after-market also continuing to grow strongly despite tough comparatives.Cash at the end of the year nearly doubled from £51.9m to £94.6m. Total debt at the end of the period was up from £721.4m to £788.4m The share price fell 4.87% to 380.70p by 12:38.JH/NR