Meggitt sales take-off

The upswing in the civil aerospace market that started in the middle of 2010 has given a big boost to specialist aerospace parts manufacturer Meggitt . In fact, underlying sales in the first half were up by an eye-catching 13 per cent.

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).

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