Cobham PLC (LON:COB), today announced preliminary results for the year ended 31 December 2018.
Financial and operating highlights
· Encouraging order intake, up 13% at constant currency and excluding divestments
· Underlying operating profit of £196.1m after £5.5m adverse currency translation and £22.5m lost contribution from divestments
· Strong performance from Mission Systems; Advanced Electronic Solutions underperformed, now planning a cost reduction with anticipated savings in 2019 of US$20m
· Boeing KC-46 agreement announced on 19 February 2019. Includes non-underlying £86m dispute settlement and £74m costs to complete, with rebased schedule and Boeing payment withhold ended
· Operating cash conversion adversely impacted by £103m utilisation of 2016 exceptional charges
Balance Sheet, new capital allocation and dividend policy
· £10.3m net cash at year end; new capital allocation policy prioritises organic investment with net debt/EBITDA gearing ratio maintained below 1.5x
· Intention to reinstate progressive dividend at 2019 interims; anticipated 1.0p in first full year
· Overall expectations for progress in 2019 remain unchanged
David Lockwood, Cobham Chief Executive Officer, 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.
“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.
“Overall the Board’s expectations for progress in 2019 remain 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.”