First half trading reflects previously announced Q1 performance issues and increased headwinds in Aviation Services. Positive momentum in Q2, including good progress in Wireless and Advanced Electronic Solutions
Like for like order intake up 28%, with book-to-bill of 1.28x, benefiting from multi-year Aviation Services Qantas award (1.00x excluding Aviation Services); other significant Connectivity awards received for next generation Airbus platforms
Improved cash conversion of 106% (2015: 77%), driven by lower working capital and capital expenditure
Rights issue completed; reducing net debt to EBITDA to 2.3x at 30 June 2016
Interim dividend per share rebased to 2.03p, with total 2016 dividend expected to be approximately 7.4p per share (£126m), consistent with the Rights Issue Prospectus
As previously announced, full year performance expected to show a more pronounced H2 earnings bias in part resulting from:
- Improving performance in Wireless; further progress expected
- Increased activity in aerial refuelling production and development programmes
- Ongoing resolution of Advanced Electronic Solutions technical and supplier quality issues
- Increased SATCOM volume, particularly related to high-speed broadband and fisheries
- On track to achieve £10m net savings in 2016; £4m achieved in H1
Bob Murphy, Cobham Chief Executive Officer, 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. However, the Board's expectations for the full year, excluding currency translation impacts, remain unchanged, with a more pronounced earnings bias to the second half of the year.
"The Board is confident that the Group's strategy of investing in technology and know-how, building and maintaining leading positions in its chosen markets each with attractive prospects, leaves Cobham well placed to deliver growth over the medium term."
