Meggitt lifts revenue guidance after trading takes off

 
Rebecca Smith
Meggitt has lifted its revenue guidance for the year after improved trading
Meggitt has lifted its revenue guidance for the year after improved trading (Source: Getty)

FTSE 250 member Meggitt this morning said it was lifting its revenue guidance for the year after trading in the second quarter proved "stronger than previously anticipated".

The engineering business which specialises in aerospace equipment, has upgraded its guidance for the year to 31 December 2018 after recording "good growth" across its civil aftermarket (which supplies spare parts and other services used in repair and maintenance),​ military and energy units.

The company said that it now expects total organic revenue growth of four to six per cent for the year, up from two to four per cent.

Read more: Meggitt lands $50m deal with Wizz Air

Shares rose nearly three per cent on the news in early trading.

Meggitt said that strong growth in air traffic alongside low levels of aircraft retirements had increased demand for its spare parts, and it now expects full-year organic revenue growth of four to six per cent in civil aftermarket - up from its previous guidance of three to five per cent.

For its military business, Meggitt said strong order book momentum had continued, which has led it to bump up guidance for full-year organic revenue growth to six to eight per cent, up from the previous forecast of three to five per cent.

A slower than expected recovery at Meggitt Polymers and Composites during the first half means the company now expects operating margins to be towards the lower end of its guidance range of 17.7 per cent to 18 per cent.

The company will announce its interim results for the six months ended 30 June on 7 August.

Alongside the upgrade, Meggitt announced a reorganisation which it said support the company's plans to ramp up organic growth. From 1 January next year, its current set-up of "capability-based business units" will instead be replaced by four "customer-focused divisions".

Tony Wood, chief executive, said: "The reorganisation of the group into four customer-focused divisions that we are announcing today provides an opportunity to accelerate growth and better leverage the operational benefits of our continued transition from a holding company to an integrated aerospace, defence and selected energy market group."

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