Meggitt warns of ‘uneven’ civil aerospace recovery
The business said lockdowns still persist in China.
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Your support makes all the difference.Meggitt has warned that the recovery of the civil aerospace sector is still “uneven” as lockdowns in China and elsewhere continue to affect the company’s business.
The aeroplane parts maker reported a 116% increase in the number of orders its civil business received in the first three months of the year compared with 2020.
But it admitted that this was partly due to the first quarter of last year being so weak.
The business reported on Thursday that revenue across the group rose by 5% in the period but is still down 23% compared with pre-pandemic levels.
Meggitt said these results reflect “the positive trajectory in civil aerospace” and growth in its energy business.
Civil aerospace revenue was up 25%, and revenue from its aftermarket division, which maintains planes for airlines, rose 37%.
The recovery in civil aerospace continues to be uneven, demonstrated by the lingering effects of the pandemic and extended lockdowns in China and continued labour and supply disruption
But the company warned shareholders that all is not rosy, and shares were flat on Thursday morning.
“We are pleased with the strengthening of conditions in the quarter,” bosses said.
“However, the recovery in civil aerospace continues to be uneven, demonstrated by the lingering effects of the pandemic and extended lockdowns in China and continued labour and supply disruption.
“We have taken a series of steps to support and engage with our supply chain and have plans in place, which we will continue to adapt as the situation evolves.”
But what impact this might have was hidden from shareholders on Thursday.
Last year, Meggitt agreed to sell itself to US-based Parker-Hannifin for £6.3 billion.
The deal has been approved by the EU Commission, with some conditions, while the UK opened an investigation over national security concerns – the business has major defence contracts.
Meggitt said on Thursday that it still expects the deal to go ahead in the third quarter of this year.
Tracing its roots back to a company that produced equipment for hot air balloons in the 1850s, Meggitt now supplies parts for both Boeing and Airbus and its brakes are used by militaries.
The business said its defence revenue has dropped 16% because the US military is not stocking up on parts as much as before.
Its energy business saw a 27% rise in revenue.