MEGGITT PLC

Financial Analysis of Meggitt Plc

Financial Analysis of Meggitt Plc

Task 1- Executive Summary of Company and its Industry

Introduction

Meggitt a British public limited company operates a successful engineering group dealing in specialize aerospace equipments. Initially company was known as Wilson Lathes and was established in 1940's as a machine tool. After 7 years of its inception company went public in 1947. Company formally changed its name from Wilson Lathes to Meggitt after acquiring a Dorset based engineering group known as Meggitt. The company is headquartered in Bournemouth Airport, Hampshire, United Kingdom. Meggitt is considering as one of the leading and most growing company in the aerospace, electronic products and defense industry. Company is listed on the London stock exchange (Meggitt). Currently there are more than 10,000 employees working in the different regions (Asia, North America, Europe and regional basis of India, Brazil, and Middle East) of the company.

Meggitt's civil aerospace operation deals in the commercial planes, helicopters, jets and general aviation while its defense segment includes Military aircrafts, radar systems, naval systems, marine threat precautionary equipments and other relevant items. Besides it, the company also manufactures water injection systems, aircraft instruments, heat exchangers, heat detectors, smoke detectors, surveillance drones and aerial target systems. Meggitt is marketing and selling its products worldwide.

UK's Aerospace Industry

UK's aerospace industry is playing a very significant role in the development of the overall economy of the country. Aerospace industry of UK is the world's second or third largest national aerospace industry with a global market share of 17%. Reported and realized turnover of the industry is around £20 billion annually (ADS, 2010). The industry provides work for 113,000 directly and 275,000 indirectly individuals. The aerospace industry is contributing around £12 billion in the form of export revenue by exporting 75% of what is produced. The industry is characterised by an increasing shift in the overall demand, according to ADS report 27,000 new passengers and 40,000 rotorcraft will be required by now and 2031 (HM Govt. 2013).

Domestic companies in the UK's aerospace industry include Meggit, Rolls Royce, Britten Norman, BAE system, GKN, Cobham, Ultra Electronic, QinetiQ while foreign players includes EADS, Bombardier, Boeing, Finmeccanica, Lockheed Martin, General Electric, MBDA, Thales Group and Sufran. The British Aerospace industry has played a very remarkable role in the history and development of aircraft. Development and advancements of first Avro type F (aircraft with enclosed cabin), the first Gloster Meteor (aircraft which provided services for Allies in Second World War), the first de Havilland Comet (commercial jet airliner), the first English Electrical lightening (aircraft with super cruise technology), the first Aerospatiale-BAC Concorde (supersonic commercial airliner), the first Airbus A300 (commercial jet with twin engine body), the first Airbus A320 (fly by wire commercial airliner) and the first Airbus 380 (largest commercial plane).

Industry Evaluation from Meggitt's perspective

The industry in which Meggitt is operating constitutes high level of competition. Entire market is divided into small chunks of market share. Meggitt is facing a tough competition from three competitors namely Goodrich ...