LONDON (Alliance News) - Cobham PLC Thursday said it has increased its dividend in 2015 after reporting robust underlying results, but the aerospace group ultimately posted a pretax loss for the year after booking impairments and restructuring charges.
Cobham reported a pretax loss of GBP39.8 million in 2014, swinging from a GBP24.3 million profit in 2014 despite experiencing a 12% lift in revenue to GBP2.07 billion from GBP1.85 billion and improving its trading margin.
The loss was caused by finance costs rising to GBP57.0 million from only GBP39.7 million a year earlier, administrative costs increasing to GBP521.7 million from GBP403.7 million and higher selling and distribution costs of GBP130.1 million from GBP100.3 million last year.
However, Cobham's underlying results, which excludes certain items and is used to measure the underlying performance of the business, fared much better, prompting the company to increase its full year dividend by 5% to 11.18 pence from the 10.65 pence paid in 2014.
Underlying pretax profit rose 11% to GBP280.0 million from GBP257.0 million with underlying trading profit rising 16% to GBP332.0 million from GBP287.0 million. The main items excluded from the underlying results are charges associated with the acquisition and integration of Aeroflex, net profit from divestments and goodwill impairment.
Cobham's order intake in 2015 amounted to GBP2.14 billion, 13% higher than the GBP1.90 billion of order intake reported last year.
Cobham said its "robust performance" was driven by the full year contribution from the Aeroflex acquisition, and said the integration of the acquisition has been accelerated and is set to be complete by the end of 2017, with cost synergies in line with original expectations.
Net debt at the end of 2015 amounted to GBP1.20 billion, reduced from GBP1.22 billion at the end of 2014.
"In 2016, we anticipate that trading in our defence and security portfolio will be stable, reflecting our expectations for overall trends in global spending in these markets. Demand conditions in some of our commercial markets remain subdued and, with the current macroeconomic uncertainty, there is no underlying improvement anticipated in these markets," said Chief Executive Bob Murphy.
"Given these factors, we will continue to manage our cost base proactively together with increased focus on cash generation and debt reduction. We expect an earnings bias to the second half of the year," he added.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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