12th Nov 2019 08:08
(Alliance News) - Aerospace and defence company Meggitt PLC on Tuesday upgraded its organic revenue growth guidance for 2019, as it reported stronger than expected trading in the third quarter, though was more cautious on its margin.
The FTSE 100 listed company posted organic revenue growth of 11% for the three months to September 30, driven by all end market segments and a particularly strong performance in Defence.
As a result, Bournemouth-headquartered Meggitt now expects organic revenue growth for 2019 between 6% to 7%, versus guidance of 4% to 6% previously. However, its operating margin is expected towards the lower end of its guided 17.7% to 18.2% range.
"While we expect good top line growth for the full year, margin progression will be constrained by mix effects, the grounding of the 737 MAX and, as discussed at the half year, pressures across our internal and external supply chain driven by the unprecedented ramp up in new aircraft production," Meggitt explained.
Meggitt said its Defence unit revenue grew by 20% in the third quarter, with strong growth in both original equipment and the aftermarket divisions. The unit is predicted to record full-year organic revenue growth of 9% to 11%, up from previous guidance of 6% to 8%.
In Civil Aerospace unit, original equipment revenue grew by 4% in the quarter. Meggitt has maintained its full-year guidance of 5% to 7%.
Civil Aftermarket revenue also increased 4% in the quarter and the unit's annual organic revenue growth estimate range has between 3% to 5%.
The Energy division revenue grew by 26% in the third quarter, driven by a strong performance in our Heatric business. The company continues to expect full-year organic revenue growth of flat to 5% for the unit.
Shares in Meggitt were 0.5% higher at 632.30 pence in London on Tuesday.
By Tapan Panchal; [email protected]
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