While its top-line performance was broadly in line with its expectations in the third quarter, margins were lower, particularly at the end of the period. This was driven by adverse mix within the civil after-market sector, as airlines deferred spares purchases through proactive management of their fleets to preserve cash, which led to lower volumes across Meggitt’s manufacturing sites.
Worse still, Meggitt said the trends continued in October.
Group revenue was down 25% year-on-year on a like-for-like (LFL) basis at £384mln, taking revenue for the first nine months of the year to £1.30bn, down 18% on a LFL basis on the same period of 2019.
The defence and energy sectors did okay in the period, with defence revenue up 9% on a LFL basis while energy revenue grew 4%.
Civil aerospace revenue was 49% lower than in the third quarter of last year.
Meggitt said it expects to deliver a full-year underlying operating profit of between £180mln and £200mln; it continues to expect to deliver positive free cash in the second half and to be free cash flow neutral for the full year at the top end of its underlying operating profit guidance range.
Shares in Meggitt, which enjoyed a spectacular rally yesterday in the wake of the news about the coronavirus vaccine being developed by Pfizer and BioNTech, shed 9.7% at 338.9p in early deals.