Meggitt H1 Underlying Pretax Profit Declines; Announces Recommended Cash Offer By Parker

(RTTNews) - Meggitt Plc (MGGT.L) reported first half profit before tax of 33.6 million pounds compared to a loss of 368.4 million pounds, previous year. Profit per share was 3.6 pence compared to a loss of 43.7 pence. The Group noted that its prior period performance significantly adversely impacted by exceptional impairment losses and other asset write-downs arising from the uncertainty facing the commercial aerospace industry following the COVID-19 outbreak. Underlying operating profit for the first half was 37% lower on an organic basis at 61.7 million pounds, reflecting a strong comparator in the first quarter of 2020. Underlying profit before tax decreased by 42% to 48.4 million pounds from 85.5 million pounds. Underlying earnings per share was 4.9 pence compared to 8.5 pence.

First half revenue was 680.0 million pounds compared to 916.8 million pounds, last year. The Group noted that first half performance reflects the impact of COVID-19 on civil aerospace, with Group organic revenue down 16% in the period against a comparator of a normal trading first quarter in 2020 before the onset of the pandemic. Defence revenue was 9% lower on an organic basis compared with a strong first half in 2020.

For the full year, the Group continues to expect: underlying operating profit ahead of 2020, and revenue broadly in line with 2020 on an organic basis.

The Board stated that it is not recommending the payment of an interim dividend for 2021.

Separately, the boards of Parker-Hannifin (PH) and Meggitt said they have reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Meggitt by Parker. Each Scheme shareholder will receive: for each Meggitt share: 800 pence in cash. The deal values Meggitt's entire issued and to be issued share capital at approximately 6.3 billion pounds on a fully diluted basis.

Parker expects the merger to be earnings accretive in the first full 12 months after closing.