7th Mar 2019 08:56
LONDON (Alliance News) - Aerospace and defence firm Cobham PLC plans to bring back its dividend in 2019, it said Thursday, as it posted a rise in profit despite revenue falling.
Cobham intends to return 1 pence per share for 2019, with around 40% of that to be paid at the interim stage.
The company returned no cash to shareholders in 2017, nor 2018, having paid out 2.03p in 2016.
Cobham's pretax profit for 2018 was GBP71.0 million, up 1.9% from GBP69.7 million a year before, despite revenue dropping 11% to GBP1.86 billion from GBP2.09 billion. Organic revenue fell 2%, after 1% growth in 2017.
Order intake in 2018 rose to GBP1.95 billion, however, from GBP1.92 billion.
Cobham has moved into a net cash position of GBP10.3 million as of the end of 2018, after being in net debt of GBP383.5 million a year before that.
Cobham said the group performance masked differing fortunes for its businesses, with Mission Systems doing much better while Communications & Connectivity and Aviation Services both met expectations.
However, Advanced Electronic Systems did not do so well, with underlying operating profit falling despite organic revenue growth. Focus in 2019 will be on turning this business around.
"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," said Chief Executive David Lockwood.
"We have strengthened its management, increased the focus on execution and formulated an overhead cost reduction plan."
"We have also set out a new capital allocation policy, which establishes a prudent approach to gearing and prioritises organic investment. We anticipate resuming dividend payments with our next interim results," Lockwood continued.
Looking ahead, Cobham's expectations for 2019 remain unchanged though it said there are "a range" of potential outcomes.
There are "considerable" opportunities for Cobham, Lockwood continued.
Shares were 2.0% lower in early trading on Thursday at 117.40 pence each.
Related Shares:
Cobham