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Meggitt's shares tumble on profit warning

Published: 12:14 28 Oct 2015 GMT

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Meggit is a component maker for the aerospace, defence and energy market

Engineer Meggitt (LON:MGGT) became the second defence-related company in two days to blame weak demand and tough markets for its profit warning.

The component maker for the aerospace, defence and energy market said profit for the year is now expected to be “meaningfully” below forecasts of £369mln.

Lower than anticipated spare part volumes for older aircraft, as well as poor volumes and a number of project deferrals also impacted margins.

The company was hit hardest in the energy market, where low oil prices are forcing firms to cut costs.

Looking to do the same, the company said it may have to cut 300 jobs, after organic growth declined 1% in its latest quarter.

Stephen Young, chief executive, said: “Clearly the current market weaknesses we are experiencing are very disappointing.”

Things don’t look any better in the fourth quarter, with the above problems expected to continue.

Shares dropped 24% to 351p.

On Tuesday, munitions and counter-measures specialist Chemring (LON:CHG) warned tough market conditions would cut a third off its underlying operating profit.

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