Meggitt shares plunge after profits take 20% hit

Meggitt’s boss said a recent fall in military spending was a “blip”

Meggitt’s boss said a recent fall in military spending was a “blip” (EPA/Edgar Dominguez)

Shares in Meggitt slumped 7 per cent as it became the latest defence and aerospace manufacturer to take a huge hit on its first-half profit, down 20 per cent to £98.2 million.

Like fellow FTSE 100 constituents Rolls-Royce and BAE Systems, Meggitt’s international focus meant that it was dented by the strong pound and took a currency hit of £53 million.

Revenue fell 11 per cent per cent from £810.1 million in the first six months of last year to £718.9 million in January to June this year.

Investors in all three groups have now been promised a vastly improved financial performance in the second half, with Meggitt chief executive Stephen Young insistent that a recent downturn in military spending was a “blip” as the Afghanistan campaign draws to a close.

Shares fell 36.6p to 466.9p.

Aggreko, the generators giant that lost its affable chief executive Rupert Soames to Serco this year, also blamed a currency hit for its pre-tax profit slipping 9 per cent to £132 million for the six months of the year.

That’s despite big temporary power contracts at the World Cup and Commonwealth Games.