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"The battery failures resulted in the release of flammable electrolytes, heat damage and smoke on two 787 airplanes. The root cause of these failures is under investigation. These conditions, if not corrected, could result in damage to critical systems and structures and the potential for fire in the electrical compartment," the statement continued. In spite of probing questions, neither the FAA nor other aviation regulators have squarely pointed the finger of blame on lithium ion batteries or their chargers and other possibilities remain with regard to the cause of the aircraft problems. Jefferies: Potential short-term effect on Meggitt share priceSandy Morris, an equity analyst at broker Jefferies weighed in on the subject on Monday pointing out that "it would be premature and quite possibly mistaken to identify lithium-ion battery technology as the villain of the piece".
Aerospace components engineer Meggitt is the ultimate owner of a company which provided battery charger units for Boeing's now grounded Dreamliner air fleet. In 2011, FTSE 100-listed Meggitt acquired Pacific Scientific, which also included the purchase of a company called Securaplane Technologies. Securaplane Tehnologies' website currently states: "Securaplane has pioneered lithium battery technology on commercial fixed and rotor wing applications, producing the charger for the lithium main ship batteries on the Boeing 787 and the aircraft's wireless emergency lighting system." The lithium-ion batteries used in Boeing's Dreamliners have come under intense public scrutiny in recent days after America's Federal Aviation Administration (FAA) issued an emergency directive which grounded all Boeing 787s operated by American airlines until the aerospace company could prove the batteries were safe. "Before further flight, operators of US-registered Boeing 787 aircraft must demonstrate to the Federal Aviation Administration that the batteries are safe," the administration stated.
Meggitt: Barclays raises target price from 450p to 520p and upgrades to overweight.
Aerospace components engineer Meggitt was a high riser on the FTSE 100 on Friday morning after Barclays Capital upgraded its rating for the stock from 'equal weight' to 'overweight' and raised its target price from 450p to 520p. BarCap said that the shares' 20% valuation discount to peers "will close as investors in the aerospace cycle look away from the more expensive pure-play names with original equipment or aftermarket exposure, and seek sector laggards like Meggitt."
Meggitt has been selected by Snecma, part of the Safran Group, to provide a package of sensor products for engines that power the Boeing 737MAX. The group, which provides high performance components and sub-systems for the aerospace, defence and energy markets, said that Snecma (through a 50/50 joint company with GE) has already secured orders for LEAP-1B engines to power over 1,000 aircraft. Meggitt said that the contract will generate revenues (including original equipment, spares and repairs) of over $300m over the life of the engine. As part of the contract, Meggitt is to supply a suite of sensing products to measure vibration, shaft speed, critical temperatures and oil level. While the company has already won engine sensor packages on the LEAP-1A and 1C in January 2012, this new contract win takes the value of Meggitt's sensors on LEAP family engines to some $500m over the lifetime of the Boeing, Airbus (A320 neo) and COMAC (C919) aircraft. "This contract underscores our belief that delivery and quality improvements will drive the group's long-term organic growth potential," according to Meggitt's Chief Executive Terry Twigger. "We are delighted that Snecma has demonstrated continued confidence in our business and look forward to strengthening our relationship further."
Meggitt: Bank of America raises target price from 430p to 470p and upgrades from neutral to buy.
Meggitt: Deutsche Bank raises target price from 425p to 445p; buy recommendation unchanged.
meggitt: Investec keeps buy rating and 435p target.
Meggitt: Jefferies raises target 300p to 365p, hold rating kept.
"We continue to expect revenue growth in 2012 to be circa 10% including the full year effect of PacSci and the disposal of the environmental control systems business [in North America] ... with operating margins broadly in line with last year despite the ongoing aftermarket softness and the currency headwind as a result of the appreciation of the Swiss Franc," the company said. The financial position of the group remains strong, driven by a good operating cash flow performance in the first half which has accelerated during the third quarter.
Third quarter organic revenues at Meggitt, the company specialising in high performance components and sub-systems for the aerospace, defence and energy markets, were in line with an exceptionally strong performance from last year. Based on current projections, and notwithstanding the uncertainty in military end markets, the group expects to see percentage revenue growth in the mid-single digits in 2013. The group has seen strong growth in its energy business more than offset continued softness in civil aerospace after-market revenues over the last year. However, Meggitt is now starting to see the anticipated effects of the phased withdrawal of troops from Iraq and Afghanistan have an effect on its military revenues. Civil aerospace end market indicators remain very encouraging, with large jet original equipment deliveries at record levels, and aircraft utilisation continuing to increase underpinned by strong load factors across the industry, Meggitt's interim management statement said. Based on these indicators, the company is expecting to see a resumption of after-market growth during 2013. As for the acquisition of PacSci in April 2011, savings are occurring at a faster rate than initially anticipated and Meggitt remains very confident in delivering the increased cost synergy run rate of $22.5m by the end of 2014.
CONT Following the acquisition of PacSci in April 2011, the Group remains very confident in delivering the increased cost synergy run rate of $22.5m by the end of 2014, and savings are occurring at a faster rate than initially anticipated. During the third quarter, the Group disposed of an environmental control systems business in North America which had revenues of c$20m in 2011. The financial position of the Group remains strong, driven by a good operating cashflow performance in the first half which has accelerated during the third quarter. We continue to expect revenue growth in 2012 to be circa 10% including the full year effect of PacSci and the disposal of the environmental control systems business mentioned above, with operating margins broadly in line with last year despite the ongoing aftermarket softness and the currency headwind as a result of the appreciation of the Swiss Franc. Based on current projections, and notwithstanding the uncertainty in military end markets, the Group expects to see percentage revenue growth in the mid single digits in 2013.
Interim management statement Meggitt PLC ("Meggitt" or "the Group"), a leading international company specialising in high performance components and sub-systems for the aerospace, defence and energy markets, today issues the following Interim Management Statement. This statement covers the period from 1 July 2012 to 1 November 2012 and constitutes Meggitt's second 2012 Interim Management Statement as required by the UK Listing Authority's Disclosure and Transparency Rules. Ongoing strong growth in our energy businesses, driven by excellent levels of order intake over the last 12 months, more than offset the continued softness in civil aerospace aftermarket revenues. We are also now starting to see the anticipated effects of the drawdown from Iraq and Afghanistan impacting our military revenues. Against this backdrop we were pleased that our third quarter organic revenues (excluding M&A and at constant currency) were in line with our exceptionally strong performance in the same period last year. Civil aerospace end market indicators remain very encouraging, with large jet original equipment deliveries at record levels, and aircraft utilisation continuing to increase underpinned by strong load factors across the industry. These indicators give us confidence in a resumption of aftermarket growth during 2013.
BROKERS INCREASINGLY BULLISH ON MEGGIT 16th August 2012 Espirito Santo Execution Noble reiterates its BUY Recommendation for Meggit and raises its target price from 480p to 495p 29th August 2012 Alphavalue upgrades Meggit to an ADD rating with a target price of 427.5p. 05 September 2012 Oriel securities retains it BUY rating on Meggit's shares with a target price of 490p. P.S. Here's some links about SCLP, one of the hottest stocks at the moment: http://www.euroinvestor.com/community/discussionthread.aspx?iid=2467508&threadid=256596&mode=2 http://www.euroinvestor.com/community/discussionthread.aspx?iid=2467508&threadid=255276&mode=2 http://www.euroinvestor.com/community/discussionthread.aspx?iid=2467508&threadid=257550&mode=2
Peter Huber, the President of Sensing Systems at Meggitt Group, purchased 8,616 shares in the firm for 409p each. The £35,239 transaction took place just a week after the aerospace components engineer said it entered the second half of the year with good momentum and an improved order book, although the civil aerospace after-market was a bit soft. Revenue in the first half of 2012 was up 19% at £776m from £649.8m in the corresponding period of 2011, while the order book finished the period up 8% year-on-year
Tempus in The Times is still fond of aerospace engineer Meggitt. Its military division is still doing well despite worries over budgets in the US while the civilian sector is ticking along nicely with orders from Boeing and Airbus. With the small, but growing, energy division performing very well, Meggitt, at just 12 times 2012 earnings is a buy.
GROUP OUTLOOK The outlook for our civil markets remains encouraging, despite the slower than expected start to the year in the aftermarket. Production of large jets is expected to continue to grow in the medium term, and we expect a return to growth in business jet and regional aircraft deliveries in 2013. Air traffic continues to grow, and while growth in 2012 looks to have moderated slightly to 4%, we expect this key driver of our civil aftermarket to grow 5% per annum over the medium term. We also believe we will see sustained growth in our business jet revenues driven by an increase in our market share and the increased ship set values resulting from the gradual transition from steel to carbon brakes. We therefore maintain our view that civil OE revenues will grow at an average of 7-8% and civil aftermarket revenues at an average of 8-9% in line with our five year guidance. In the military market, uncertainties around US DoD spending, in particular around the possibility of sequestration, are likely to affect new programme awards. However, assuming sequestration does not occur, we continue to expect 2% compound annual revenue growth in line with our five year guidance underpinned by strong positions on workhorse platforms and continued retrofit programme success. Energy, driven by heightened demand for our printed circuit heat exchangers and increasing market share in condition-monitoring equipment, should deliver revenue growth averaging greater than 15% over the five years ending 2016. Other markets should continue to see modest growth. On the basis of the above, the Group expects to make further good progress in 2012.
Terry Twigger, Chief Executive, commented: "The business delivered good top line growth in the first half, with particularly strong performances in the military and energy end markets. The work undertaken to reshape the Group with the Transformation programme over the last three years, enhanced by our ongoing focus on achieving world-class operations and programme management, leave us in excellent shape to continue to deliver good organic growth. As a sign of our continuing confidence in the prospects for the Group, the interim dividend has been increased by 12.5% to 3.6 pence."
· The Group achieved good growth in the first six months of 2012: o Revenues increased 19%, with all major end markets contributing to growth. o Underlying profit before tax increased by 15% to £168.5m. o Good momentum going into the second half of 2012, with closing order book up 8% compared to the first half of 2011. · Increased levels of investment in capex and R&D to support recent contract wins. · Net debt reduced to 1.6x EBITDA (2011: 1.9x). · Interim dividend increased by 12.5%, reflecting ongoing confidence in the business model. · PacSci has continued to trade in line with expectations. Incremental cost synergies of $4.6m were achieved in the first half, in line with the increased target run rate of $22.5m by the end of 2014. · The Group continues to expect organic(2) revenue growth of 6-7% over the medium term in line with our five-year guidance, with double-digit revenue growth in 2012 including the full-year impact of PacSci.
Terry Twigger, CEO of Meggitt, commented: "This award follows on from a decade of successful operation of our equipment in Brazil by Petrobras and other clients. After completing the contract, Petrobras will have the largest operating inventory of this technology." Tupi BV is a joint venture between Petrobras (65%), the BG Group operator (25%) and Petrogal Brasil SA - Galp Energia (10%). GUARA BV is a joint venture between Petrobras (45%), BG Group (30%) and Repsol-Sinopec (25%).
Meggitt wins $100 million-plus heat exchanger contract from Petrobras Meggitt, a leading international company specialising in high performance components and sub-systems for aerospace, defence and energy, has been awarded a $100 million-plus contract for over 200 innovative high-performance compact printed circuit heat exchangers (PCHEs). These PCHEs will be for gas processing applications on Petrobras' floating production, storage and offloading (FPSO) vessels in the Lula and Guará Pre-Salt fields in the Santos Basin, offshore Brazil. Building on the success of previous PCHE solutions delivered to Petrobras for the Lula and Guará Pilot projects, Meggitt's diffusion-bonded heat exchanger technology has been selected for its superior performance and compactness, which enables higher production capacity from the FPSO's topside space envelope and also because of its high integrity, which delivers superior safety. The PCHEs will feature in gas compression, gas injection and CO2 separation modules-26 heat exchangers for each of the eight Pre-Salt FPSOs. The contract, Meggitt's largest so far in this market segment, is with Tupi BV and Guara BV. Starting in 2012 for completion in 2017, the majority of heat exchangers will be assembled in Brazil in line with Meggitt's commitment to provide local manufacturing content where possible. A new Meggitt company, Meggitt Do Brasil, will be used to collaborate with suppliers on the ground on materials sourcing, project management, fabrication, training, aftermarket services and field support.
Investec Securities retained its "buy" stance on Meggitt (MGGT) with a 430p target price. The broker expects the aerospace and defence engineering company's strong trading momentum in 2011 to have carried over into the new year, forecasting full year earnings growth of 11.2% to 35.2p. Investec noted the strength of the firm's order book and its increased product offering and pointed to the company's confidence in its business, demonstrated by the 14% increase to the 2011 dividend. Meggitt shares slid 0.2p to 407.1p.