LONDON -- Blue-chip defense and engineering contractor Meggitt
Chief executive Terry Twigger said: "The business delivered good top-line growth in the first half, with particularly strong performances in the military and energy end markets."
Twigger added that the integration of Pacific Scientific Aerospace, which Meggitt bought from Danaher Corp. for $685 million last year, was performing well. He said: "PacSci has continued to trade in line with expectations. Incremental cost synergies of $4.6 million were achieved in the first half, in line with the increased target run rate of $22.5 million by the end of 2014."
He continued: "The work undertaken to reshape the Group with the Transformation programme over the last three years, enhanced by our on-going focus on achieving world-class operations and programme management, leave us in excellent shape to continue to deliver good organic growth."
The company said it will increase the interim dividend by 12.5% to 3.6 pence per share as a reflection of its ongoing confidence.
Shares in Meggitt gained 1% to 400 pence in early trading, which values the FTSE 100 member at around 11 times earnings. The prospective yield is a respectable 3%.
Over the last 10 years, shares in Meggitt have appreciated some 180%. But with dividends reinvested, the total return has grown by more than 280%, which equates to an annual return of 14.4%.
This morning's update from Meggitt underlines how solid companies can become wonderful investments for ordinary investors.
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David does not own shares in Meggitt or Danaher Corp. The Motley Fool has a disclosure policy.
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