4th Nov 2009 07:00
4 November 2009
Cobham INTERIM MANAGEMENT STATEMENT
For the first nine months of 2009 the Group's revenue has grown strongly, broadly in line with the Board's expectations, including acquisitions and favourable currency translation. Cobham's military and government businesses have performed well in continuing healthy market conditions and it is encouraging to report that Cobham Defence Systems' revenue is now beginning to benefit from the recent order intake for vehicle intercom systems. As expected, Cobham's commercial businesses have declined in generally unfavourable market conditions.
Since the end of the first half of 2009, there have been a number of material events and transactions:
It was announced at the interim results that the US Army VIS-X programme for next generation vehicle intercom systems, which is worth US$1.2 billion to Cobham over ten years, had been protested by one of the losing bidders. In October this protest was denied and the programme will now progress with the Cobham-Northrop Grumman team as the selected supplier. Two orders valued at US$40 million were announced in October for the supply of the ROVIS (AN/VIC-3) digital vehicle intercom system under the current agreement with the US Army;
A contract award was announced in July to provide microclimate cooling systems to the Air Warrior programme office, with expected revenue of up to US$110 million over the next five years;
Also in July, Cobham announced a contract modification from the US Navy worth US$32 million to provide additional AN/ALQ-99 Low Band Transmitters and a US$15 million contract for the development and demonstration of the low-cost Wireless Network after Next, with potential for deployment throughout the Armed Services;
In October an AUD$100 million contract extension was announced for the provision of air freight services to Australian air Express until 2015. A further £18 million contract was announced in August to modify and support four King Air aircraft for the first phase of the UK Military Flying Training Service (UKMFTS).
In August, it was announced that Andy Stevens, currently Cobham's Chief Operating Officer, had been appointed as Cobham's new Chief Executive with effect from 1 January 2010. On the same day Cobham announced the retirement of the Chairman, David Turner, at the conclusion of the Annual General Meeting in May 2010. The process for identifying a successor to the Chairman continues.
At the end of September, Cobham's net debt had increased to £468 million (30 June 2009: £442 million). This was primarily due to the July payment of the final dividend, an adverse movement in foreign exchange rates, as most of Cobham's debt is US dollar denominated, and net deferred acquisition related payments, partly offset by good cash generation from operations in the period.
As a result of the strong order book of £2.5 billion, the progress with vehicle intercom deliveries and the benefits of continuing efficiencies, including the integration of facilities and procurement savings, the Board expects to achieve its previous outlook of further progress, with the fourth quarter performance expected to lead to increased levels of organic revenue growth from the Technology Divisions in the full year.
Cobham's preliminary results for the year ended 31 December 2009 will be announced on 4 March 2010.
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ENQUIRIES
Cobham plc
Allan Cook, Chief Executive +44 (0)1202 882020
Warren Tucker, Chief Financial Officer +44 (0)1202 882020
Julian Wais, Director of Investor Relations +44 (0)1202 857998
Susan Ellis, Senior Communications Advisor +44 (0)7836 522722
NOTES
1. Cobham's products and services have been at the heart of sophisticated military and civil systems for more than 70 years, keeping people safe, improving communications and enhancing the capability of land, sea, air and space platforms. The Company has four divisions employing more than 12,000 people on five continents, with customers and partners in over 100 countries and annual revenue of £2bn.
2. This document contains 'forward-looking statements' with respect to the financial condition, results of operations and business of Cobham and to certain of Cobham's plans and objectives with respect to these items.
Forward-looking statements are sometimes but not always identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'targets', 'goal', or 'estimates'. By their very nature, forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that may or will occur in the future.
There are various factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies, political situations and markets in which the Group operates; changes in government priorities due to programme reviews or revisions to strategic objectives; changes in the regulatory or competition frameworks in which the Group operates; the impact of legal or other proceedings against or which affect the Group; changes to or delays in programmes in which the Group is involved; the completion of acquisitions and divestitures and changes in exchange rates.
All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to Cobham or any other member of the Group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Cobham does not intend to update these forward-looking statements.
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