British aircraft parts supplier Meggitt expects to benefit from airlines renewing fleets with more fuel-efficient planes this year, after that trend helped it deliver strong growth in 2011 profit.
The company, which supplies flight displays and wheels to Airbus and Boeing, said on Tuesday 2011 pre-tax profit rose 26 percent to GBP£323 million (USD$513 million) on sales 25 percent higher at GBP£1.45 billion.
"Airbus and Boeing have seen their delivery rates ramp up steeply in the last few years and that will continue in 2012, while the aftermarket for spares and repairs has seen a recovery since the slowdown a couple of years ago," chief executive Terry Twigger told reporters.
"That makes me quietly confident we can deliver a similar level of profit growth in 2012."
Meggitt's civil aerospace unit, which accounts for 45 percent of group revenue, grew sales by 16 percent during the year and the company expects this trend to continue in 2012.
Commercial aircraft demand is rising as high oil prices force airlines to renew fleets with more fuel-efficient planes.
Fast-growing Gulf and Asian carriers have been ordering new planes in recent years, while airlines in the United States are renewing older fleets.
Suppliers to the civil aerospace sector have been boosted by order book growth at Airbus and Boeing, who expect combined deliveries for 2012 to be 15 percent ahead of last year.
Meggitt's rivals GKN and Senior last week posted strong profit growth, boosted by an uplift in orders at their aerospace businesses.
Meggitt said revenues at its military business, which accounts for around a third of sales, rose 5 percent in 2011. It expects the growth rate to slow in 2012 because of further cuts to defense spending in the United States, its biggest market.
"We see a growth rate in defense of around 2 percent in 2012 but there should be more opportunities in terms of maintaining existing equipment and retrofitting existing kit," said Twigger.
The FTSE 100 group increased the full-year dividend by 14 percent to 10.50 pence and said it expects revenues to grow by an average of around 7 percent over the next five years.