Cobham slumps as it swings to first-half loss

Shares in Cobham tumbled on Thursday after the FTSE 250 aerospace and defence group said it swung to a loss in the first half and cut its interim dividend.

For the six months to the end of June, the company posted a pre-tax loss of £38m from a profit of £4m the year before as revenue slid 13% to £917m.

The group said first-half trading reflects previously-announced first-quarter performance issues and “increased headwinds” in the aviation services business.

Cobham, which has issued two profit warnings in the past 12 months, declared an interim dividend of 2.03p per share, down from 2.585p in the first half of 2015.

Chief executive Bob Murphy said: “After a challenging start to the year we have delivered a significant improvement in trading performance in the second quarter.

"We have won a number of key contract awards in the first half and notably every one of the sectors has a stronger order book than a year ago. Our balance sheet is now strengthened and we have achieved stronger cash generation. A number of challenging market and contract execution risks still remain ahead of us, including on our development programmes, and macro-economic uncertainties that could have an impact on our shorter cycle businesses.”

Still, Cobham said its expectations for the full year, excluding currency translation impacts, remain unchanged, with a more pronounced earnings bias to the second half of the year.