Engineering group Meggitt (MGGT) expects civil aerospace organic revenue will be down 30 per cent in the six months ended in June, leading to a 15 per cent decline for the group as a whole. The company has been grappling with widespread lockdowns, with almost two thirds of the global fleet grounded and a drop in passenger demand and air traffic.
Management said that it expects significant free cash outflow, after interest and tax, in the first six months, driven in part by low levels of profitability and cost reduction measures being weighted towards the second half. But this will be offset by the sale of Meggitt Training Systems for a cash consideration of $146m, which was announced on 1 July.
Based on the group’s modelling assumptions, Meggitt expects free cash outflow in the first half to be reversed during the second, and to be free cash flow positive for the full year before the disposal proceeds.
