A second major profit warning in six months caused a 13 per cent collapse in Cobham (COB) shares on Monday 24 October, as the FTSE 250 aerospace and defence group said weak third-quarter trading in its satellite communications, wireless and integrated electronic solutions divisions would hit full-year profits.
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The manufacturer, which this summer was forced into an emergency cash raising amid falling sales and ballooning acquisition costs, once again looks like it will stretch its borrowing covenants. Management now believes net debt will sit at 2.6 times cash profits by the end of the year, even though a stated aim of the April fundraising was to reduce the ratio to a multiple of around two.