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Meggitt (MGGT) Ordinary 5p Shares

Sell:605.20p Buy:605.80p 0 Change: 9.00p (1.51%)
FTSE 100:0.67%
Market closed Prices as at close on 23 October 2019 Prices delayed by at least 15 minutes | Switch to live prices |
Change: 9.00p (1.51%)
Market closed Prices as at close on 23 October 2019 Prices delayed by at least 15 minutes | Switch to live prices |
Change: 9.00p (1.51%)
Market closed Prices as at close on 23 October 2019 Prices delayed by at least 15 minutes | Switch to live prices |
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

HL comment (5 November 2014)

Interim management statement: Meggitt reported 5% organic revenue growth in the third quarter, but said it expects this level to moderate in the fourth quarter. It added that it expected organic revenue growth in the low to mid-single digit per cent for 2015, below the 6 to 7% average it forecast for the medium term in March, as the company continues to be impacted by US military budget cuts. More positively, the aircraft parts supplier announced a £250 million share buyback programme, taking advantage of its strong balance sheet to return cash at a time when it said there was a lack of acquisition opportunities. Investors welcomed the buyback news, with its share price rising over 6% in mid-morning trade. In all, current market consensus opinion signifies a hold.

Read more share research from Hargreaves Lansdown

Financial Highlights:
  • Total reported revenue in the third quarter fell 2%, with the organic growth being more than offset by the net adverse impact of foreign exchange translations, acquisitions and disposals.
  • A £250 million share buyback programme was announced, taking advantage of the group's strong balance sheet and limited acquisition opportunities.

Negative Points:
  • In today's announcement, Meggitt cautioned that revenue growth would "moderate" in the final quarter. In August the company cut its 2014 full-year expectations for organic revenue growth to low single digit percent from mid-single digits, citing bigger than expected declines in US military spending and challenges in its energy business.
  • Currency movements provide potential to generate major headwinds. The risks principally relate to US dollar/Sterling exposure.
  • The civil aerospace industry has historically proved volatile. Major customers such as Boeing and Airbus are dependent on the highly competitive and cyclical airline industry. 
  • Failure to react to fundamental changes in the civil and military aftermarket would impact.
  • Meggitt has relied on acquisitions to drive growth. This strategy carries with it the risks of overpaying for acquisitions or failing to integrate acquired companies which could impact on shareholder value.

Positive Points:
  • Investors reacted positively to the share buyback programme with Meggitt's share price rising over 6% in mid-morning trade, the second highest riser on the FTSE100 index.
  • The group previously launched Meggitt Production System (MPS), its single global approach to continuous improvement at 16 of its sites in 2013, with a further 16 scheduled for 2014 and the remainder in 2015, with significant operational improvements already in evidence.
  • In August, within its Civil Aerospace division, Meggitt announced notable contract wins including full ATA26 fire protection and control systems on Boeing's newest family of single-aisle aircraft, the Boeing 737MAX, wheels and brakes on the recently launched Dassault Falcon 8X business jet and condition monitoring equipment on a new, as yet undisclosed, aero engine.
  • The financial position of the group remains "very strong". 

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