Full-year guidance and medium term targets for margin and cash reconfirmed.
Reported revenue growth of 10% benefitted from currency movements. Flat organic revenue reflects 2% growth in civil aerospace and flat military revenue, partially offset by the expected, continued weakness in energy (down 14%).
Underlying operating profit growth of 7% includes currency benefits. Underlying operating margin reduced, as expected, to 18.0% reflecting primarily the stronger second half weighting of revenue and phasing of expensed research and development costs.
Strong momentum on key strategic initiatives:
o Good progress on the Meggitt Production System ('MPS'), particularly in respect of inventory where a focus at our more advanced sites has started to yield benefit.
o Further improvement at Customer Services & Support ('CSS'), where we have acquired additional MRO capabilities and secured long term agreements to support airline customers.
o Contract wins, including award of the braking system for the A321neo and additional content on both 777X and C919.
o Continued focus on actively managing the portfolio, having completed the sale of three non-core industrial businesses5 to Amphenol Corp.
o Manufacturing footprint reduced to 48 sites following closure of the Corona site and disposals.
Strong free cash in-flow of £19m (June 2016: £33m outflow).
Healthy balance sheet with net debt:EBITDA on a covenant basis of 2.2x (June 2016: 2.6x).
Interim dividend up 5% to 5.05p.
