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Meggitt warns on profits as civil aerospace division drives down sales

The group's civil aerospace division, which accounts for around half of total sales, has been hit by coronavirus travel restriction impacts

Meggitt PLC - Meggitt warns on profits as civil aerospace division drives down sales

Meggitt PLC (LON:MGGT) has warned its first half will see lower levels of profitability, while revenue is expected to slump by 30% in the second quarter.

In a trading update, the company said revenue for the six months to June 30, 2020, is estimated to fall by 15% on last year, mostly driven by civil aerospace – accounting for around half of total sales – which has seen a 30% drop amid travel restriction impacts.

READ: Carnival, easyJet, Meggit and Centrica poised to drop out of FTSE 100

The group's energy division revenue is also estimated to be lower than last year, though defence revenue is expected to rise by 1%-5%.

The FTSE 250-listed engineer said it is making good progress in delivering cost-saving measures, while the “significant” free cash outflow in the first half will be offset by the sale of its training systems subsidiary for US$146mln.

As of May 31, 2020, Meggitt said it had £1.6bn of committed facilities in place, while the group is also eligible to access extra cash via the Bank of England's Covid Corporate Financing Facility.

Shares shot up 6% to 322.8p on Thursday at the opening bell.

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Quick facts: Meggitt PLC

Price: 282.8 GBX

LSE:MGGT
Market: LSE
Market Cap: £2.21 billion
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