Magellan's revenue continues its ascent
First-quarter profit soars 206 per cent
By OLIVER Bertin
Aerospace Reporter
The Globe & Mail
May 15, 1998
TORONTO - Magellan Aerospace Ltd. has maintained its stky-high climb in revenue and profit through the first quarter, an ascent that has been fueled bynacquisitions and lucrative aerospace contracts.
The Toronto-based company - the descendant of financially troubled Fleet Industries Ltd. - reported revenue of $87.3-million in the three months to March 31, up 80 per cent from the same period the year before. Profit rose 206 per cent to $6.1-million while share profit rose 120 per cent to 11 cents.
Murray Edwards, chairman and chief executive officer, expects that performance to continue through the rest of the year. Calling 1997 "very successful," he said the outlook for 1998 was very strong. "It looks good to the end of the century."
Speaking at the annual meeting in Toronto yesterday, he forecast a 65-per-cent climb in revenue to $415-million for 1998, and said profit could double to $32-million depending on the extent of competition in North America and abroad.
Investors are impressed. Magellan's share price has more than doubled over the apst 52 weeks, and it climbed another 25 cents to close at $10.25 yesterday.
"We're committed to grow the business," Mr. Edwards told shareholders. "And we're starting to see some of the benefits" of the recent expansion.
Mr. Edwards is most pleased with the acquisition of Bristol Aerospace Ltd. last summer, a purchase that gave Magellan the critical mass it needed to compete on the world market. Shortly after, Bristol signed a contract with Boeing Co. worth $50-million in sales.
Magellan's latest purchase closed on Wednesday. Chicopee Manufacturing Ltd. of Kitchener, Ont., has added sophisticated metal-working skills, particularly in titanium and other aerospace metals, to the company.
Mr. Edwards said Magellan is on the lookout for more acquisitions in its three core areas: aerostructures; the repair, overhaul and maintenance of aero engines, and proprietary products like the recently certified V-8 airplane engine that goes into production this summer.
He said the outlook for Magellan is very good. Its prime customer, Boeing, is planning a steady production rate of 48 jetliners a month, and Mr. Edwards believes the Asian economic crisis will have little impact on the products that Magellan makes. |
