Profits fly higher at Meggitt

Aerospace and defence group Meggitt today said it was on track for a strong annual performance after posting record half-yearly profits.

The group, which is based in Wimborne, Dorset in England, said demand for spare parts and repairs in the civil market was steadily improving, while military equipment sales remained strong.

It also said that a 9% improvement in its order book and a recent company-transforming acquisition left it well-placed for an “exciting future”.

Meggitt employs around 5,200 staff and makes equipment for aircraft including the US Air Force’s C-5 transport plane, US Navy MH60 helicopter and is developing defence systems for the Royal Air Force’s Tornado fighter bomber.

In July it announced it was acquiring the design and manufacturing arm of rival Dunlop Standard for £408m (€600.1m).

Pre-tax profits before goodwill and exceptionals rose by 5% to £37.5m (€55.2m) in the six months to June 30.

The aerospace division saw a 7% hike in operating profits to £35.3m (€52m), including a good performance from four acquisitions made in 2003, which were all performing in line with or ahead of expectations.

However, operating profits at the electronics arm fell by 7% to £6.2m (€9.1m). Before the effect of currency fluctuations and investment at a new facility in China, this figure was 14% higher than last year.

Within the aerospace arm, Meggitt said its engine vibration monitoring system, which provides early warning of engine bearing deterioration, had been certified for use on all Boeing 737 aircraft.

The company won a number of new aerospace equipment contracts in both the commercial and military sectors, including one for Israeli Aircraft Industries.

Meggitt said its markets were expected to continue to improve, although the effects of the weak US dollar would continue to have an impact in the second half.

It said the purchase of Dunlop Aerospace was a transformational acquisition and that its integration would be a key priority over the next few months, with teams already in place to carry out essential tasks.

Dunlop’s design and manufacturing arm supplies original equipment, parts and services to the aerospace and defence industry.

It has 1,200 customers worldwide including regional, business and commercial aircraft and helicopter manufacturers and operators, government organisations and engine manufacturers.