Cobham reinstates progressive dividend

Defence and aerospace outfit Cobham intends to reinstate a progressive dividend policy after strengthening its balance sheet in 2018.

Cobham recorded an underlying operating profit of £196m for 2018, down 8% year-on-year as a result of adverse currency translations and a £22.5m loss contribution from divestments, as revenues slid 10.9% to £1.86bn.

However, with the FTSE 250 resident reporting a net cash balance of £10.3m at the year end, a marked turnaround from the £383.5m net debt position it was in a year earlier, Cobham now expects to pay a full-year dividend of 1p.

Cobham saw a strong performance from its mission systems unit but said that its advanced electronic solutions wing underperformed and that it was now planning cost reductions for the department with anticipated savings in 2019 of $20m.

Chief executive David Lockwood said: "We can see the benefits of our improvement actions starting to come through across most of the business, particularly so in Mission Systems.

"However, Advanced Electronic Solutions underperformed. We have strengthened its management, increased the focus on execution and formulated an overhead cost reduction plan."

Looking forward, Lockwood said the board's expectations for its progress in 2019 remained 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 and our continuing focus on customers, culture, operational improvement, business simplification and cash will allow us to realise this potential."

As of 0810 GMT, Cobham shares were down 0.63% at 119p.