Cobham boss warns of tough year ahead as profits fall 38pc
COBHAM’S chief executive yesterday warned that trading would decline in 2014, as full-year profits plunged 38 per cent due to US budget cuts.
“Trading conditions are expected to remain challenging in 2014 with potentially significant foreign currency headwinds and continued pressure on US defence and security investment accounts,” said Bob Murphy.
“However, we anticipate that our strong and growing positions in attractive commercial markets and the generally positive prospects for our non-US defence and security markets will partially offset this, and we continue to plan for group organic revenue to decline by low-to-mid single digits in 2014.”
The FTSE 250-listed defence contractor reported a 33 per cent decline in earnings per share to 10.7p in 2013, but revenue edged up two per cent to £1.79m.
“Cobham have shown quite what a consistent theme has emerged in defence stocks this results season: defence remains under pressure on both sides of the Atlantic, and the majority of Europe-based companies will have a down year in 2014 before a hoped-for recovery in 2015,” said Sash Tusa, analyst at Edison Investment Research.
Shares closed two per cent higher.