Significant strategic progress which positions the business to return to organic revenue growth from 2015, despite challenging market conditions
Encouraging book-to-bill of 1.03x; order intake up 10% before M&A at constant currency
Total revenue growth of 3% driven by acquisitions and like-for-like commercial revenue growth of 5%; commercial now the Group's largest end market segment at 39%. Group organic revenue3 down 2%
Trading profit impacted by change in product mix, aerial refuelling development programme performance and unfavourable foreign currency translation
Private venture4 investment increased to 6.7% of revenue (2013: 6.2%)
Initial trading contribution from Aeroflex in line with expectations and integration off to a good start
Underlying EPS also in line with management expectations (before impact of pre-announced £15m aerial refuelling provision)
Statutory profit before tax and EPS includes significant non-underlying charges associated with Aeroflex acquisition and restructuring initiatives
Successful refinancing of Aeroflex acquisition bridge facility, securing long term funding facilities for core debt
Recommended 10% increase in full year dividend; future dividend progression to be broadly aligned with underlying earnings growth, while rebuilding dividend cover over time
Commenting on the results and outlook Bob Murphy, Chief Executive Officer, said:
"In 2014 we made significant progress on the delivery of Cobham's strategic objectives. Completing the Aeroflex acquisition was a key highlight, increasing the Group's exposure to growing commercial markets, and Aeroflex's post acquisition trading and integration has been in line with the Board's expectations. This progress enhances Cobham's position as a technology company with exciting prospects based on its close customer relationships, differentiated technology and know-how, market leading positions and an increasingly strong operational foundation.
"The year also included a number of challenges. Although Cobham delivered good order intake and saw the expected overall improvement in revenue in the second half, the Group's revenue mix has changed over time. There has been a decline in the higher margin shorter cycle businesses which are exposed to land related defence and security markets. This has been largely offset by an increase in lower margin engineering and development revenue. Additionally and as previously announced, due to the identification of a limited number of technical maturity issues, the Group recognised a £15m provision relating to its aerial refuelling development programmes. We remain confident that these programmes will be delivered in line with our current projections and will lead to significant streams of production and aftermarket revenue over an extended timeframe.
"Overall we have made significant progress on the delivery of our strategic objectives in 2014 and, as anticipated, Cobham remains well positioned to deliver mid-single digit organic revenue growth from 2015."
