Aerospace engineer Meggitt this morning cancelled its interim dividend as profit at the FTSE 250 firm tumbled more than a third in a “very challenging” second quarter.
Although the figure was better than anticipated after the coronavirus pandemic decimated the aviation industry, shares in the company fell 3.6 per cent in the morning’s trading.
Meggitt said that profit fell 37 per cent in the first half, slipping from £161m in 2019 to £102m in the same period this year.
The firm reported a statutory loss of £349m, swinging into the red after a £91m profit last year, largely due to goodwill charges.
Reported revenue also fell 14 per cent, from £1.07bn to £917m in the first half of the year.
Meggitt’s net debt also reached £1bn, up from £911m at the end of the last financial year, including adverse foreign exchange movement of £65m.
It said that due to cost control measures it was on track to make savings of between £400m and £450m this year.
With the aerospace industry heavily exposed to the pandemic, Meggitt said it would not be providing any full year guidance.
“The recovery in civil aerospace remains sensitive to spikes in Covid-19 cases, creating near term uncertainty about the pace and shape of a recovery”, it said in a statement.
“As a result, and recognising that there could be a range of outcomes in our civil business in the last four months of the year, our guidance for the group for the full year remains suspended.”
What Meggitt said
Chief executive Tony Wood said: “We had a very challenging second quarter in which we acted fast, executed well operationally and took action to position the Group for the recovery in civil aerospace.
“Our first half performance was impacted by the ongoing effects of Covid-19 in our civil aerospace business driven by the unprecedented reduction in global air traffic activity.
“We are still working through a difficult and uncertain Covid-19 environment, and while it’s too early to precisely predict the trajectory of the return to prior levels of activity in civil aerospace, we continue to focus on ensuring that the business is well positioned to benefit from the recovery.”