Macroeconomic pressures and tumbling energy and commodity prices meant organic sales dipped 1 per cent at Cobham (COB) in 2015. But include robust growth at Aeroflex - the US wireless communications group acquired in 2014 - and the defence contractor's adjusted operating profit swelled 16 per cent to £332m.
Shipping and oil and gas companies spent less on marine communications, sending organic sales down 6 per cent in Cobham's key commercial business. US defence and security revenue also dipped, reflecting less production work in the advanced electronics segment. The bright spot was the smaller non-US defence and security division. Sales there climbed 4 per cent as Asia Pacific and Middle Eastern nations clamoured for missile control systems.
Cobham's directors sold off peripheral businesses and ramped up technology investments. They also commenced test flights of the group's KC-46 tanker, which can refuel airplanes in flight. And they're on track to integrate the Aeroflex microelectronics business by the end of 2017, well ahead of schedule. But although they expect steady defence and security trading in 2016, they don't anticipate a recovery in commercial markets.
JPMorgan Cazenove expects adjusted EPS of 16.8p in 2016, rising to 19.8p next year.
| COBHAM (COB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 223.2p | MARKET VALUE: | £2.54bn | |
| TOUCH: | 223-223.2p | 12-MONTH HIGH: | 341p | LOW: 223.2p |
| DIVIDEND YIELD: | 5% | PE RATIO: | na | |
| NET ASSET VALUE: | 80p* | NET DEBT: | 133% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.85 | 234 | 16.8 | 8.00 |
| 2012 | 1.75 | 204 | 16.0 | 8.80 |
| 2013 | 1.79 | 127 | 10.7 | 9.68 |
| 2014 | 1.85 | 24.3 | 2.6 | 10.65 |
| 2015 | 2.07 | -39.8 | -3.4 | 11.18 |
| % change | +12 | - | - | +5 |
Ex-div: 28 Apr Payment: 27 May *Includes intangible assets of £1.73bn, or 152p a share | ||||
