Bottom Line: Wobbly Meggitt

MEGGITT, the engineer, also yields 6 per cent but its position appears less secure. It supplies the aerospace, construction and petrochemical industry with sensors and control gadgetry.

Thanks largely to acquisitions, it managed to sustain profits through recession. Yesterday, however, it reported interim profits for the six months to 30 June that were down by 20 per cent. Taxable profits were pounds 8.6m. Sales fell back, so did profit margins, and earnings per share slipped to 2.5p from 3.3p.

Ken Coates, chairman, was downbeat on prospects. There is little hope of improvement from aerospace until 1996 and Meggitt's part of the German market for industrial products remains weak.

The shares fell 2p yesterday to 79.5p. With analysts reducing full- year profit forecasts from pounds 25m to pounds 18m the shares trade on a price/earnings ratio of 14.4 - an unsurprising 15 per cent discount to the sector. There seems little hope of short-term progress.