Meggitt shares dip on news of falling revenue

 
Caitlin Morrison
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ENGINEERING firm Meggitt saw shares tumble by 5.78 per cent yesterday after it reported a five per cent drop in revenue during 2014, to £1.55bn from £1.64bn in 2013.

The company said organic revenue growth of six per cent in its civil aerospace operation was offset by declines in military and energy units, and also cited the negative impact of currency for driving revenue down. Profit plummeted by 13 per cent, falling from £378m to £329m, despite orders increasing by four per cent.

Stephen Young, Meggitt chief executive, said 2014 was challenging for the group, “exacerbated by the impact of external factors including a significant foreign exchange headwind”. Young also revealed that the proposed final dividend was up eight per cent on 2013, “reflecting our continuing confidence in the prospects for the group”.

Sash Tusa, analyst at Edison Investment Research, said increasing the dividend “sends an especially strong signal about the company’s confidence for 2015”.

He added: “Coupled with the ongoing share buyback, it is hard to escape the conclusion that Meggitt is feeling especially positive towards its shareholders at present.”