Meggitt First-Half Profit Falls on Lower Military Revenue

By Dow Jones Business News, 
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By Tapan Panchal

LONDON--Meggitt PLC (MGGT.LN) on Tuesday reported a 20% fall in first-half pretax profit due to weaker-than-expected revenue growth in its military division, and said that it has therefore decided to revise its full-year guidance for the division.

"Performance in the first-half was mixed, with very strong orders but weaker-than-expected military revenue," Chief Executive Stephen Young said.

"Group revenue was lower due to the well-trailed impacts of currency, disposals and an unusually high second-half weighting this year, which also impacted our margin," he added.

For the six months ended June 30, the company reported a pretax profit of 98.2 million pounds ($165.29 million), down from GBP122.4 million in the year ago period, on a revenue of GBP718.9 million and GBP810.1 million, respectively. Stripping out exceptional items and tax, profit for the period declined by 21% to GBP143.8 million.

The FTSE100-listed company has declared a 8% increased dividend for the period of 4.25 pence per share.

The aerospace equipment engineering company said that is revising its full-year military guidance to a mid-single digit decline from a low-single digit decline, driven by a reduction in the higher margin after-market businesses. It expects full-year total organic revenue growth to be in the low-single digits.

Meggitt separately said that its safety systems division has been awarded a contract by Boeing Company ( BA ) to manufacture and support the fire protection system for the 737 MAX engine and auxiliary power unit. It didn't disclose any financial details of the contract.

-Write to Tapan Panchal at tapan.panchal@wsj.com

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