Midway through February we warned that Cobham's (COB) beleaguered shareholders "might be tapped up in the coming months". Sure enough, the defence contractor has announced plans to raise £500m by way of a rights issue, to be completed in the second quarter. Given the state of the defence contractor's balance sheet, you hardly had to be Mother Shipton to see that one coming. But it echoes last year's cash call when the previous management was forced to shore up group finances in the wake of the $920m (£736m) 'over the odds' deal to acquire Aeroflex in 2014.
News of the rights issued accompanied full-year figures largely foreshadowed at the time of February's profit warning, the latest of a handful issued since November 2015. Adjusted pre-tax profit came in at £175m, down from £280m in the prior year, but the group lurched further into negative earnings territory due to some hefty write-downs, including more than £150m on a development contract for new air-to-air tankers for the US Air Force - unfortunate given that Cobham was a pioneer in the field.
JPMorgan Cazenove forecasts pre-tax profit of £166m and EPS of 6.5p in 2017, compared with 9p last year.
| COBHAM (COB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 127p | MARKET VALUE: | £2.17bn | |
| TOUCH: | 127-127.3p | 12-MONTH HIGH: | 224p | LOW: 103p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | na | |
| NET ASSET VALUE: | 29p* | NET DEBT: | £1.03bn | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 | -2.8 | 11.18 |
| 2016 | 1.94 | -848 | -52.8 | 2.03 |
| % change | -6 | - | - | -82 |
Ex-div:- Payment:- *Includes intangible assets of £1.17bn, or 68p a share | ||||
