Higher demand for jet planes helps Meggitt record 29% increase in profit

Higher demand for jet planes helps Meggitt record 29% increase in profit

	Published : Thu, 09 Mar 2006 02:15 By : Richard Owen Print this Story

LONDON: Meggitt Plc., Britain's aerospace and defence engineering firm, said its 2005 profits rose 29 per cent as demand for commercial jet planes increased and there was a pick-up in defence deals during the year. Its earnings before tax and excluding amortisation and exceptional items was 116.3 million pounds, compared with 90.3 million pounds in 2004, while turnover too recorded a 29 per cent increase at 616.3 million pounds.

Meggitt, supplier of black boxes, carbon brakes, fire detection systems and other equipment to both Boeing and Airbus as well as military aircraft, said new acquisitions, including its 2004 purchase of Dunlop Aerospace, contributed 112.6 million pounds to the turnover.

The company predicted two more years of solid growth though it may not be as fast as it was in 2005. It said while its defence markets are strong, in the civil aerospace side, both in original equipment and civil aftermarket, it expected substantial growth.

Chief executive Terry Twigger said the company is poised to take advantage of the sustained recovery in the large jet civil market and associated aftermarket, while military markets continued to be attractive. He said large jet production is expected to increase by 21 per cent in 2006 and 11 per cent in 2007.

Twigger did not rule out further acquisitions, saying there are a dozen or so 50-million-pound-type businesses and a handful of larger businesses, which are available for takeover.

The company's Aerospace unit, which generates nearly three-quarters of its income, saw large defence deals like the one from Eurofighter. The company has also been contracted to make engine monitoring systems and other equipment for Airbus' A380 aircraft.

The company had a weak performance in its electronics unit, as the automotive markets remained weak. The company also caters to medical equipment makers.

In terms of divisional performance, in Aerospace division turnover increased 36 per cent to 458.6 million pounds and underlying operating profit increased 37 per cent to 107.2 million pounds. In defence systems business, turnover increased 25 per cent to 86 million pounds and underlying operating profit by 19 per cent to 14.7 million pounds. Electronics unit's turnover went up by just 1 per cent 71.7 million pounds and underlying operating profit fell by 2.3 million pounds to 8.7 million pounds.

At the end of 2005, the company's order book was up 30 per cent against corresponding 2004 figures.

The company has declared a dividend of 5.3 pence, up 10 per cent, for a total dividend of 7.7 pence.

Meggitt shares fell 1.4 per cent to 377 pence.