Stephen Young’s first annual results as chief executive at military and civil aircraft engineer Meggitt were something of a damp squib today, with 2013 pre-tax profit down 4% to £269.4 million.
The figure would have been marginally up on the previous year but for a £20 million hit on what it described as a “raw material supply issue” dating back to 2012. However, this one-off problem did not hide the fact that the declining US military budget is affecting a British company specialising in clever products for the Pentagon.
Meggitt’s military division saw sales fall 1% to £616.4 million and Young, who took over Meggitt in May last year, said there were “more twists and turns left”.
He added that the “long-term trend” would be at least some growth in military budgets given recent international tensions.
Meggitt’s revenue was up 2% to nearly £1.64 billion in 2013. The improvement was largely down to the civil aerospace division, which accounts for 45% of group sales.
Investors were also wooed by an 8% rise in dividend, which was confirmed at 12.75p a share, as the stock rose 13.1p to 508p.