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Interim Results

Cobham maintains FY outlook

03 August 2017 07:20

Cobham has reported first half results in line with expectations and maintain its full year outlook - although it said there remained a wide range of potential outcomes for 2017.

Group order intake was lower at £915.8m (2016: £1,170.4m), with order intake in 2016 benefiting from an initial net AUS$719m order booked relating to the significant multi-year contract extension from Qantas.

Excluding this from the comparator, order intake was up 4% at constant exchange rates.

Group revenue increased to £1,003.3m (2016: £916.7m), driven by favourable currency translation.

The group's organic revenue was broadly flat, largely as a result of a 5% (£12.6m) organic increase in the Advanced Electronic Solutions Sector being offset by a 3% (£12.1m) decrease in the Communications and Connectivity Sector.

The group made a statutory operating profit of £34.7m (2016: £12.0m loss).

Group underlying operating profit was £89.9m (2016: £102.2m) after a favourable currency movement of £13.0m.

Excluding the impact of currency translation, this is a reduction of £25.3m with the largest contributors to this being: - A £9.4m reduction in the Advanced Electronic Solutions Sector, due to £7.5m of increased costs as the Sector continued the build out of IT and functional infrastructure, in addition to an adverse revenue mix;

- An £11.2m reduction in the Aviation Services Sector, being the combined impact of reduced natural resources flying, the repriced Qantas contact commencing on 1 January 2017 and a £2.7m charge relating to the settlement of legacy issues;

- Additional IT amortisation of £2.8m relating to a large historic Enterprise Resource Planning (ERP) IT project (CBOS), which was recognised in the Head Office and Other segment. The costs of CBOS were largely capitalised up to the end of the first half of 2016.

Chief executive David Lockwood said: "We have been working hard to build the foundations for our future success but we are in the early stages of implementing a challenging turnaround in the Group's performance.

"Cobham has a number of high quality businesses with differentiated technologies and know-how and leading positions in a number of attractive markets - this gives us confidence in Cobham's future."

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