The upswing in the civil aerospace market that started in the middle of 2010 has given a big boost to specialist aerospace parts manufacturer
Civil aerospace sales grew 18 per cent to £267m on the back of an increase in narrow body jet production by both Boeing and Airbus. That was reflected in original equipment sales that were 27 per cent higher at £89m, compared with 14 per cent growth in the aftermarket for spare parts. Chief executive Terry Twigger said there was an element of re-stocking earlier this year, but the indications are that customers are now ordering parts in response to increased use, which is positive for Meggitt.
The defence segment was more robust than expected, with sales rising 6 per cent to £239m. Mr Twigger said this was largely a result of recurring revenues and new contract wins generated by the group's defence training arm. Meanwhile, an increase in oil exploration, stimulated by high prices, meant Meggitt's energy division reported a 37 per cent increase in revenues to £50m.
Evolution Securities is keeping its 2011 forecasts unchanged for now to see whether organic growth is sustained in the second half. The broker forecasts full-year pre-tax profits of £303m and EPS of 28.8p (£256m and 27.8p for 2010).
|ORD PRICE:||378p||MARKET VALUE:||£2.93bn|
|TOUCH:||377-378p||12-MONTH HIGH:||401p||LOW: 256p|
|DIVIDEND YIELD:||2.53%||PE RATIO:||16|
|NET ASSET VALUE:||222p*||NET DEBT:||49%|
|Half-year to 30 Jun||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Ex-div: 10 Aug
Payment: 30 Sep
*Includes intangible assets of £2.34bn, or 301p a share
A forward PE ratio of 13 suggests Meggitt's growth prospects are already priced into the company's valuation, leaving little scope for outperformance. Fairly priced.
visible-status-Standard story-url-Meggitt interims.xml