Defence and aerospace group Meggitt returns to growth and appoints former Rolls-Royce executive as COO

 
Francesca Washtell
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Meggitt is a FTSE 250-listed defence, energy and aerospace company

Shares in aerospace and defence giant Meggitt rose almost five per cent today after the firm appointed a former Rolls-Royce executive as its new chief operating officer and reported a return to organic growth.

Tony Wood, a former head of aerospace at Rolls-Royce, will join Meggitt on 1 December.

Chief executive Stephen Young said Wood's "extensive industry experience and track record of successfully managing complex operations" will be "invaluable" to the group, which said it is targeting more operational efficiencies.

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The fall in sterling since the EU referendum and M&A activity last year lifted revenues 28 per cent in the third quarter. Excluding these factors organic growth was still boosted six per cent year-on-year, Meggitt said in a trading update today.

Revenue in its civil aerospace arm, which designs and supplies aerospace systems and components, rose by nine per cent.

Turnover at its military branch, which accounts for around a third of all revenues, rose by six per cent, but "challenges" in its offshore oil and gas activities drove a revenue decline of eight per cent in its energy unit.

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The trading update and COO appointment lifted Meggitt's share more than four per cent in mid-morning trading, to 464.2p.

Meggitt Meggitt | mobile image

The group said it expects to achieve low single digit organic revenue growth for the year, in line with previous guidance. In August, Meggitt posted a drop in profit before tax of 60 per cent.

Last week, Meggitt Training Systems was awarded two Ministry of Defence small-arms training contracts worth approximately $20m (£16m).

Young said:

Current trading is in line with our expectations and, having increased shipset content on key growth platforms, we are confident that we are well positioned to deliver organic revenue growth ahead of our end markets over the medium term.

We continue to make positive progress on our key strategic initiatives, most notably the Meggitt Production System and the new customer support and services organisation, which is now fully operational.

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