Cobham reports in-line trading, somewhat non-committal on outlook

Defence electronics and communications specialist Cobham described first quarter trading conditions as in-line with management's expectations as it continued to work on streamlining and simplifying its business, but in terms of the full-year outlook, and although management expected to continue making "progress", a "range of potential outcomes" was still deemed possible.

In a trading update published ahead of the firm's annual shareholders' meeting, Cobham boss David Lockwood said: "We continue to focus on improving operational performance and simplifying the business."

"[...] Over the past two years, we have returned Cobham to financial strength, announced our new capital allocation and dividend policy and, slowly but surely, we are resolving the contract, legal and regulatory issues that the business has faced."

During the quarter, the company began its cost reduction plan at its Advanced Electronic Solutions Sector unit, which focuses on communication and electronic warfare systems, with executives anticipating savings of $20m for 2019.

At the Mission Systems unit meanwhile, it continued to advance on completing the qualification process for its wing aerial refuelling pod for the US Air Force's KC-46 tanker, with completion penciled-in for the middle of 2020.

Cobham also put paid during the period to its ongoing dispute with the US Air Force as regards its WARP, paying the $63m balance that was left due on the settlement.

The company also announced its pick to become its next chairman, Jamie Pike, starting from 1 May.

The board's outlook was unchanged from that provided on 7 March, the company said in a statement, while highlighting "the considerable opportunities to improve the performance of the Group over the medium term and the continuing focus on customers, culture, operational improvement, business simplification and cash will allow the Group to realise its potential."

At the start of March, Cobham had said that "overall the Board's expectations for progress in 2019 remain unchanged with a range of potential outcomes. We continue to believe that there are considerable opportunities to improve the performance of the Group over the medium term."

As of 0910 BST, shares in Cobham were edging up by 0.17% to 115.65p.