Meggitt plc swings to £314 million of net loss in 2020 due to COVID-19 disruptions

Written by: Wajeeh Khan
March 4, 2021
  • Meggitt swings to £314 million of net loss in 2020 due to COVID-19 disruptions.
  • The British international company reports £1.68 billion of full-year revenue.
  • Meggitt plc cancels its final dividend due to the Coronavirus uncertainties.

Meggitt plc (LON: MGGT) said on Thursday that it concluded 2020 with a pre-tax loss as the ongoing Coronavirus pandemic fuelled costs last year. The dovish performance also pushed the company into cancelling its final dividend.  

Meggitt shares tanked roughly 3% in premarket trading on Thursday but jumped more than 5% on market open. Including the price action, the stock is now trading at £4.46 per share after recovering from a low of £2.17 per share in the first week of April 2020, when the impact of the COVID-19 crisis was at its peak.

Meggitt reports £1.68 billion of full-year revenue

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For 2021, Meggitt expressed confidence that its underlying operating profit will see a year over year increase. Revenue this year, it added, will remain in line with 2020. The British international company reported £334 million of pre-tax loss in the recently concluded year. In comparison, it had posted £286.7 million of profit in 2019.

Chief Executive Tom Wood said on Thursday:

“The roll-out of vaccines, coupled with significant pent-up demand to travel, provides a supportive backdrop for the recovery in civil aerospace in 2021, although this positive development is likely to take time to feed through into growth in global flight activity and the aftermarket.”

Meggitt’s net loss in 2020 stood at £314.2 million versus the year-ago figure of £222.6 million of profit. The FTSE 250 listed company valued its full-year revenue at £1.68 billion on Thursday – a decline from £2.28 billion in 2019. In a report published in September, Meggitt had recorded a 14% annualised decline in its H1 revenue.

Other prominent figures in Meggitt’s financial update

According to FactSet, experts had forecast the company to register £360.6 million of pre-tax loss. The company’s own guidance was for £1.7 billion of revenue in 2020. Other prominent figures in Meggitt’s financial report on Thursday include £191 million of underlying operating profit. In 2019, its underlying operating profit had come in at a much higher £402.8 million.

On an organic basis, Meggitt further added, orders saw a 38% decline in 2020 to £1.55 billion. In a separate announcement, Meggitt confirmed on Thursday that Alison Goligher will succeed Guy Berruyer as the Board’s Senior Independent Director.

Meggitt performed fairly downbeat in the stock market last year with an annual decline of close to 30%. At the time of writing, the British firm has a market capitalisation of £3.45 billion.