Good organic order intake supports 2017 growth expectations
Reported revenue growth of 21% benefitted from foreign currency movements and the composites acquisitions completed in late 2015
Group organic revenue growth of 1%: organic revenue growth of 4% in civil aerospace and 1% in military partially offset by continued weakness in energy
Underlying operating profit growth of 17% includes benefit from currency and composites acquisitions. Underlying operating margin reduced to 19.1% due to revenue mix, acquisitions and increased depreciation and amortisation
Further progress on strategic initiatives:
o Furthest advanced Meggitt Production System (MPS) sites achieving significant inventory and productivity improvement
o Customer Services & Support (CSS) contributing to strong growth in civil aftermarket: 5.4% versus market growth of 3.5%5
o Footprint rationalisation programme: three sites closed in 2016
o Portfolio rationalisation: disposal of Meggitt Target Systems
Integration of composites acquisitions progressing well - synergy target increased 30% to $12.7m
Statutory profit before tax decline included £66m non cash loss on the marking to market of financial instruments, principally currency hedges
Healthy balance sheet with net debt:EBITDA reduced to 2.1x, well within target range
Recommended final dividend up 5% to 10.3p, resulting in full-year dividend up 5% to 15.1p
Stephen Young, Chief Executive, commented:
"2016 trading was very much in line with our expectations and the stronger second half performance gives us good momentum going into 2017.
We are past the peak of engineering investment on the many new aircraft programmes that have recently entered, or are entering, into service. Our increased content on these new programmes will drive higher revenue in the coming years.
We are now focusing our resources to accelerate progress on our key operational initiatives which we expect will deliver significant improvement in operating margin and cash conversion by 2021.
Reflecting our continuing confidence in the prospects for the Group, the proposed final dividend is 10.3p, resulting in a full year dividend up 5% to 15.1p".