Activist investor Elliott Management increased its position in Meggitt this morning driving up the share price of the struggling engineer nearly nine per cent.
Elliott is the second major investor in Meggitt shares over the last few days.
Norges Bank took a three per cent stake on Friday and Elliott, who had already built up a considerable interest during 2016, increased its interest to just over five per cent this morning. Elliott's stake was purchased through a contracts for differences position rather than the direct shareholding taken by Norges.
Last week the Bournemouth-based company revealed interim results that showed that profit before tax had sank by 60 per cent. The company attributed much of this to a £51m loss on the mark-to-market of currency positions.
Although underlying revenues increased from £794m to £883m with underlying earnings broadly flat at £213m, statutory earnings per share more than halved from 12.5p to 5.4p. The free cash flow swung from a £38m inflow to an outflow of £33m and net debt jumped from £712m to £1.2bn.
Elliott has a history of taking significant positions in companies with a view to shaking up management or influencing strategic direction.
Recently it has increased its position in ultra-discounter Poundland, a strategy that threatened to derail South Africa retailer Steinhoff's takeover of the company.