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Meggitt FY19 Pre-tax Profit Up 33%; Chairman Sir Nigel Rudd To Step Down

Aerospace, defence and energy company Meggitt Plc (MGGT.L) reported Tuesday that its full year 2019 profit before tax grew 33 percent to 286.7 million pounds from 216.1 million pounds last year. Earnings per share increased to 28.8 pence from 23.2 pence a year ago.

Statutory profit for the year includes a non-cash gain of 15.0 million pounds from the marking to market of financial instruments, principally currency hedges against future transaction exposures, a gain of 23.5 million pounds from disposals completed during the year, and operating exceptional costs of 26.2 million pounds primarily related to the new Ansty site.

Underlying profit before tax was 370.3 million pounds, compared to 334.8 million pounds last year. Underlying basic earnings per share were 37.3 pence, compared to 34.2 pence a year ago.

Revenue for the year grew 9 percent to 2.28 billion pounds from 2.08 billion pounds last year. Organic revenue grew by 9 percent, reflecting strong performance in growing end-markets; with 8 percent growth in civil aerospace, 11 percent in defence and 10 percent in energy.

Orders rose 10 percent to 2.47 billion pounds. The company noted that organic order growth was also 10 percent, underpinning expectations for long term revenue growth.

Further, the company recommended a final dividend of 11.95 pence, giving a full year dividend of 17.50 pence, an overall increase of 5 percent.

Looking ahead to fiscal 2020, Meggitt expects to deliver Group organic revenue growth of 2 percent to 4 percent, and an increase in underlying operating margins of 30 to 50 basis points.

The company noted that strong content and exposure to the fastest growing and hardest worked platforms will continue to underpin organic revenue and profit growth.

However, sector specific factors including the production halt of the 737 MAX and supply chain disruption, as well as the wider macroeconomic impact of COVID-19 are expected to hold back margin progression in the short-term.

The company expects to deliver low to mid-single digit organic revenue growth and underlying operating margin in the range of 18.5 percent to 19.0 percent in 2021.

Meggitt said that its chairman, Sir Nigel Rudd, intends to step down from the Board by to spend more time on his business and other interests. He will remain as Chairman until a successor is appointed, but will not seek re-election at the 2021 AGM.

Sir Nigel was appointed as Chairman in 2015. Guy Berruyer, Senior Independent Director, will lead the search for Sir Nigel's successor.

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