Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Specialist engineering group Meggitt (LON:MGGT) has published interim results this morning. The
company has significant exposure to the aviation market, so the fall in air travel as a result of COVID-19 has taken a toll, with revenues for the division down by 27%. This has pushed operating profits for the company down by 37%, with write downs and impairment charges resulting in a £349m statutory loss. The company is in a good liquidity position and has decided to suspend the dividend to further reserve cash. Given the uncertainty about how quickly air travel can return to normal, forward guidance is suspended.
Half year numbers from Fevertree drinks (LON:FEVR) are also out today, covering the six months to end of June. A strong off-trade performance has bolstered the company in a time where on- trade closures hit sales through bars and restaurants. Performance in the US was especially notable, with revenues for the territory rising by 39%, well ahead of expectations. The impact of COVID-19 has however taken a toll, with revenues down 11% overall and gross profits off by 20%. There is however sufficient confidence for the business to increase the divided by 4%.
Q1 results from the equipment hire company Ashtead Group (LON:AHT) are also out today, covering May, June and July. As management say, this was an operationally challenging quarter, so the fact revenues fell by only 8% is perhaps to be applauded. The company hasn’t seen any adverse collapse in business in the US, a territory which has been instrumental driving growth, but in terms of outlook, assuming there’s no second wave, then management expect full year revenues to be down by mid to high single digits, suggesting no quick rebound from here.
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