Third quarter organic revenues at Meggitt, the company specialising in high performance components and sub-systems for the aerospace, defence and energy markets, were in line with an exceptionally strong performance from last year.
Based on current projections, and notwithstanding the uncertainty in military end markets, the group expects to see percentage revenue growth in the mid-single digits in 2013.
The group has seen strong growth in its energy business more than offset continued softness in civil aerospace after-market revenues over the last year. However, Meggitt is now starting to see the anticipated effects of the phased withdrawal of troops from Iraq and Afghanistan have an effect on its military revenues.
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Civil aerospace end market indicators remain very encouraging, with large jet original equipment deliveries at record levels, and aircraft utilisation continuing to increase underpinned by strong load factors across the industry, Meggitt's interim management statement said. Based on these indicators, the company is expecting to see a resumption of after-market growth during 2013.
As for the acquisition of PacSci in April 2011, savings are occurring at a faster rate than initially anticipated and Meggitt remains very confident in delivering the increased cost synergy run rate of $22.5m by the end of 2014.
"We continue to expect revenue growth in 2012 to be circa 10% including the full year effect of PacSci and the disposal of the environmental control systems business [in North America] ... with operating margins broadly in line with last year despite the ongoing aftermarket softness and the currency headwind as a result of the appreciation of the Swiss Franc," the company said.
The financial position of the group remains strong, driven by a good operating cash flow performance in the first half which has accelerated during the third quarter.
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