Meggitt will seek more acquisitions in the sensor, aircraft engine and energy sectors as it builds on its growth and operational performance of last year.
Terry Twigger, chief executive, said the aerospace and defence engineering company would use acquisitions to gain new products as well as new markets. “We would rather be a consolidator than to be consolidated,” he said, noting though that a takeover of Meggitt was never out of the question given it is a publicly traded company.
Mr Twigger has gone a fair way to make it more difficult for any would-be suitor, with growth in all three of the company’s main businesses last year.
Meggitt was particularly buoyed by the civil aviation industry’s push to improve fuel efficiency. But it also proved it could exploit its engineering prowess in aerospace and defence to capture newer markets, such as energy where organic revenues rose 28 per cent.
Even its defence division, which is facing budget cuts in the US as well as the end of a decade of the spoils of war in Iraq and Afghanistan, managed 5 per cent organic revenue growth.
Meggitt said on Tuesday its order book last year grew 26 per cent, while its overall revenue was £1.46bn, up 25 per cent and pre-tax profit was up 31 per cent at £226m. Earnings per share were 23.8p, up 20 per cent and the company increased its dividend 14 per cent to 10.5p – a sign of Mr Twigger’s confidence for solid cash flow this year.
The results were largely in line with expectations, though some commentators noted Meggitt’s forecast could prove optimistic.
“We are slightly more cautious than Meggitt’s outlook for civil aftermarket and defence revenue,” said Celine Fornaro of Bank of America Merrill Lynch.
Part of Meggitt’s success last year came from quickly integrating Pacific Scientific Aerospace, which it bought from Danaher in April in order to add fire and smoke suppression to its portfolio of equipment that detects and protects against fire.
Savings in the past nine months hit $6.5m, well above the $4m target. Meggitt expects the swift realisation of synergies to continue and has increased its 2014 cost savings target 60 per cent to $22.4m.
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