Meggit increases its 2017 interim dividend by 5%

DividendMax Ltd.

Meggit increases its 2017 interim dividend by 5%

Full-year guidance and medium term targets for margin and cash reconfirmed.

Reported revenue growth of 10% benefitted from currency movements.  Flat organic revenue reflects 2% growth in civil aerospace and flat military revenue, partially offset by the expected, continued weakness in energy (down 14%).

Underlying operating profit growth of 7% includes currency benefits.  Underlying operating margin reduced, as expected, to 18.0% reflecting primarily the stronger second half weighting of revenue and phasing of expensed research and development costs.

Strong momentum on key strategic initiatives:

o Good progress on the Meggitt Production System ('MPS'), particularly in respect of inventory where a focus at our more advanced sites has started to yield benefit.

o Further improvement at Customer Services & Support ('CSS'), where we have acquired additional MRO capabilities and secured long term agreements to support airline customers.

o Contract wins, including award of the braking system for the A321neo and additional content on both 777X and C919.

o Continued focus on actively managing the portfolio, having completed the sale of three non-core industrial businesses5 to Amphenol Corp.

o Manufacturing footprint reduced to 48 sites following closure of the Corona site and disposals.

Strong free cash in-flow of £19m (June 2016: £33m outflow).

Healthy balance sheet with net debt:EBITDA on a covenant basis of 2.2x (June 2016: 2.6x).

Interim dividend up 5% to 5.05p.

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