Meggitt shares continue to soar but profit set to halve
Shares in aerospace engineer Meggitt jumped 12.8 per cent this morning despite warnings that profit would halve for the full year.
In a third quarter trading statement, the FTSE 250 firm said that the global aerospace sector was still “weak”, with revenue down to £384m in the period.
Across the nine months to date, it has booked £1.3bn in revenue, down 18 per cent year-on-year.
The British manufacturer also said that it expected to report full year profit between £180m and £200m.
The figure is almost half that which Meggitt posted in 2019, when it booked £402.8m in profit.
However, it welcomed the news that Pfizer and Biontech’s coronavirus vaccine had proved effective in 90 per cent of cases.
It was this announcement which prompted Meggitt’s shares to surge yesterday, and despite an early wobble the stock continued to rally this morning.
With international air travel still subdued due to travel bans, Meggitt said that its performance had been underpinned by a stable performance by its energy and other businesses.
Civil aerospace revenue was 49 per cent lower than in the third quarter of last year.
Meggitt added that it was also on track to deliver £400 to £450m in cost savings for the full year.
Chief executive Tony Wood said: “While we remain alive to the challenges which Covid-19 continues to pose, we are encouraged by recent news on vaccine development and the positive implications for air travel.
“With diverse end market exposure, strong market positions, and having taken a range of decisive actions, we remain well placed for the recovery.”