Having just hit a new all-time high and with equity markets weaker generally,
On an underlying basis, group pre-tax profit grew 26 per cent to £323m, and by 14 per cent excluding the Pacific Scientific acquisition. Much of that came from civil aerospace as Airbus and Boeing fight to meet demand for new fuel-efficient passenger jets. Organic revenue there grew by 16 per cent - sales of parts to the manufacturers jumped over a quarter and aftermarket business was up 12 per cent. With deliveries tipped to take off in 2012, Meggitt expects equipment sales growth to average 7 per cent to 8 per cent over the next five years and a bit more from aftermarket.
Defence cuts have been a worry though, given the military accounts for 40 per cent of revenue. Still, sales here rose 5 per cent and management says upgrade work should offset any dip in spend on new fighter planes. Growth this year, however, will be nearer 2 per cent.
Broker Bank of America Merrill Lynch expects 2012 adjusted EPS of 35.6p (31.5p in 2011).
|ORD PRICE:||380p||MARKET VALUE:||£2.98bn|
|TOUCH:||380-381p||12-MONTH HIGH:||403p||LOW: 300p|
|DIVIDEND YIELD:||2.8%||PE RATIO:||16|
|NET ASSET VALUE||229p*||NET DEBT:||44%|
|Year to 31 Dec||Turnover (£bn)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Ex-div: 14 Mar
Payment: 11 May
*Includes intangible assets of £2.79bn, or 357p a share
Civil aerospace led the way and guidance is for organic sales growth to average 6 per cent to 7 per cent over the next five years. However, the defence segment looks vulnerable and a rating of 11 times forward earnings is fair. Hold.
Last IC view: Fairly priced, 378p, 2 August 2011