Meggitt’s chief executive will step down at the end of 2017 after a turbulent five years at the aerospace components maker, which reported a further bump on Tuesday as revenues in one of its divisions grew more slowly than expected in the third quarter.
Tony Wood, currently Meggitt’s chief operating officer, will take over as CEO on January 1, though Stephen Young will stay at the company to work with Mr Wood until he retires at the end of April.
Mr Young’s tenure was marked by a series of sales warnings shortly after he took the reins, and it has since worked to turn itself around with by cutting costs and restructuring its supply chain. Shares in the company have recovered around a 33 per cent from their 2015 nadir, but are practically flat compared to when Mr Young became chief.
A separate announcement on Tuesday highlighted the company’s bumpy path to recovery, with organic revenue growth flat year on year in the third quarter due to a slower than expected ramp up of new civil aerospace programmes. Meggitt warned that the slow spending “will continue into the fourth quarter”.
The company had been hoping that faster growth in civil aerospace would offset a decline in its military arm, where revenues fell by 5 per cent. However, it was optimistic that military sales would improve in the fourth quarter, and said it is on track to meet full-year guidance for organic revenue growth and underlying operating profit margins.
Outgoing chief Mr Young said:
Meggitt remains on track to meet full year guidance and we are pleased with progress across the business despite challenges in some of our end markets. Growth accelerated in civil aerospace during the third quarter and we expect to see further improvement in the fourth quarter, particularly in military where we have see strong order growth in the last three months.
Meggitt is well positioned for the future having won increased shipset content on key civil platforms which will drive accelerated growth for decades to come. Over the past five years we have made significant progress on our strategic initiatives and are beginning to see the financial benefits, most notably from the Meggitt Production System with our first sites entering the latter stages of the programme demonstrating the potential for improvement in both margin and cash