Meggitt set to sell controls company

Meggitt confirmed last week that it is in talks to sell part of its industrial controls business following a sharp fall in turnover. Revenues in the Slough-based business, which develops systems for the oil and gas industries, were down by a third during the first half of the year, contrasting with a very strong performance […]

Meggitt confirmed last week that it is in talks to sell part of its industrial controls business following a sharp fall in turnover.

Revenues in the Slough-based business, which develops systems for the oil and gas industries, were down by a third during the first half of the year, contrasting with a very strong performance in the group’s aerospace business and a 10% increase in half-year profits.

Chief executive Mike Stacey said the group would consider selling Mowbrey, one of its industrial controls businesses: `There has been a lot of interest expressed in the company but whether that manifests itself as an acceptable price is another matter,’ he said.

The group’s other industrial controls unit, Heatric, has also been affected by lower investment levels in the oil and gas industries, mainly brought about by the economic crisis in the Far East and the low price of crude oil.

The company made clear, however, that Heatric is still seen as a core business and as long as the oil price stays above $19 a barrel, it should improve in the full year.

Meggitt’s aerospace business, meanwhile, went from strength to strength during the first half-year.

Income from avionics is set to increase substantially in the full year following the integration of Whittaker, acquired in July for £236m. The acquisition strengthens Meggitt’s position with Airbus and adds to its existing Boeing workload.

Stacey said the group felt well insulated against the forecast slowdown in the civil aerospace cycle.

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