Cobham eyes lift as its civil aviation sales head upwards

City A.M. Reporter
BRITISH aero electronics group Cobham expects to deliver further growth this year after cost cuts and a strong performance from commercial aviation boosted 2011 profit.

Cobham, whose equipment helps military vehicles such as F-35 fighter planes communicate with one another, yesterday said 2011 pre-tax profit rose seven per cent to £328m on sales three per cent lower at £1.85bn. Cobham’s revenue growth has been hit by cuts to government defence budgets in the US, which account for 56 per cent of its sales.

The company, which said it would increase its full-year dividend by a third to eight pence, said a fall in US defence sales was offset by growing military sales in emerging markets such as Brazil and a buoyant civil aviation business, which it expects to keep growing.

“The positive trend in our export and commercial markets are expected to continue in 2012 and we expect to deliver underlying progress this year,” said Cobham’s chief financial officer Warren Tucker.

“The increase in the dividend is a clear statement of confidence in the business model” said Investec analyst Andrew Gollan.