Cobham says FCA dropping insider dealing investigation

Defence group Cobham said on Wednesday that the Financial Conduct Authority has decided to discontinue its investigation into the company's handling of inside information.

"The company has fully co-operated with this investigation throughout," Cobham said in a statement.

The watchdog announced last March that it had launched an investigation into the company over its handling of inside information ahead of a trading update and rights issue announcement in April 2016, which saw the company warn over a 70% drop in profits.

Cobham said at the time that it had been informed "orally" that it was being referred to the FCA's enforcement division for investigation in connection with its handling of inside information and that it was co-operating fully.

The rights issue, which was intended to reduce debt that built up after the company overpaid on acquisitions, was announced alongside a profit warning on 26 April 2016. However, in its preliminary results a month earlier, Cobham had posted a 9% rise in pre-tax profit and a 16% jump in trading profit and said it expected trading in its defence and security portfolio to be stable in 2016.

At 1510 BST, the shares were up 1% to 126.50p.