* FY underlying pretax profit up 3 percent at 377.8 mln stg
* Says on course for rev growth of 6-7 pct over medium term
* Full-year dividend up 8 percent at 12.75p
* Shares up 2.7 percent, recover from near 3-month low (Adds CEO comments, analyst comment, share price)
By Sarah Young
LONDON, March 4 (Reuters) - British aircraft parts supplier Meggitt Plc said it was on course to meet its guidance for the year after ironing out production problems in the United States, and it lifted its dividend as a sign of confidence in future growth.
The FTSE 100 company, which has a stock market value of about 4 billion pounds ($6.7 billion), reiterated guidance for mid-single digit organic or self-generated revenue growth this year, adding it was on course to deliver at the 6 to 7 percent level on average over the medium term.
The reassurance on 2014’s outlook, coming after a revenue downgrade last November, buoyed its shares which traded up 2.7 percent at 507.75 pence by 0903 GMT, making it one of Britain’s top blue chip risers. The stock had fallen in the previous session to its lowest since mid December.
“This is a bit of relief that the numbers are in line and that the guidance is intact,” Societe General analyst Zafar Khan said.
Meggitt’s stock had fallen 12 percent since Nov. 1, when it warned revenue would grow by a low single-digit percent amount, down from a previous forecast for mid-single digit growth. It blamed a supply issue with a raw material in the United States as it consolidated two factories, plus currency headwinds due to the strength of the pound against the dollar.
“They (the issues) are either sorted or there’s a plan that we’re working through and they’ll be sorted soon,” Chief Executive Stephen Young said in an interview on Tuesday.
Meggitt, which supplies flight displays and wheels to planemakers Airbus and Boeing, reported a 3 percent rise in 2013 underlying pretax profit to 377.8 million pounds, in line with forecasts, and said it would hike its full-year dividend 8 percent
“What it says is we’re confident with our 6 to 7 percent revenue growth forecast in the medium term,” Young said. The final dividend of 8.8p per share takes the yearly total to 12.75p.
Adverse currency movements could impact Meggitt’s profitability this year, however, Young warned, adding that he expected analysts to adjust their 2014 forecasts to account for those headwinds.
Growth this year would be driven by a recovery in the market for aircraft spares, Young predicted, noting customers had been destocking in recent years but the company was now seeing the beginning of restocking.
Meggitt’s energy business which accounts for about 10 percent of its total sales would also drive growth this year, Young forecast.
Demand from oil and gas customers for valves, sensors and heat exchange units produced by Meggitt was expected to rise 10 percent or more this year, Young said. ($1 = 0.5982 British Pounds) (Editing by James Davey and David Holmes)