Profit alert rocks shares at Meggitt

SHARES in aerospace and defence group Meggitt nosedived by more than 20pc after the firm issued a profits warning.

More than 300 jobs may be lost as the engineer steps up its efforts to cut costs.

At one point the warning wiped more than £700m off the value of the Bournemouth-based company, which employs 10,500 people worldwide. It said trading in the third quarter was below expectations, due to a ‘marked deterioration’ in September.

The firm now expects underlying profits for the full year to be ‘meaningfully below’ the £369m City analysts had been anticipating. That lopped 94.4p off the share price, which fell to 367p.

‘Clearly, the current market weaknesses we are experiencing are very disappointing,’ said chief executive Stephen Young.

He added that he is ‘ taking further action’ to strip out costs and claimed he remains confident in the medium to long-term prospects for the company.

Meggitt was hit by a 2pc dip in military sales. The steepest fall came in its energy division, where sales dropped 16pc due to a slump in demand for oil rig equipment.

The company expects difficult conditions to continue in the final quarter of the year. While cash flow is strong, gearing will be higher than previous guidance, it said. The profit warning at Meggitt is the second from the sector in as many days.

Chemring, which makes ejector seats for fighter jets, and military flares, put out a profit warning yesterday and announced plans for an emergency capital raising after a contract from a Middle East customer was hit by delays.

Its shares lost a further 3.3pc, dropping 5.75p to 169.5p yesterday. That followed a drop of 23pc on Tuesday.