Cobham trading profit falls short of guidance, scraps dividend

(ShareCast News) - Aerospace and defence group Cobham posted group trading profit below guidance for the year ended 31 December and said it was not recommending a final dividend.In a post-close trading update, the company said group trading profit for the year came in at £245m, below the range of £255m to £275m set out in the update back in October. Cobham said the detailed year end close and audit is ongoing but is not expected to result in an increased trading profit."The new management team is commencing a thorough closing balance sheet review, including major contracts and asset carrying values. The trading profit disclosed above is before any adjustments that may arise from this review and, in particular, there is significant uncertainty surrounding the outcome of the KC-46 tanker programme," the company said.Net debt at the end of December stood at £1.03bn versus £1.21bn in 2015.As a result of disappointing trading and higher-than-expected net debt, Cobham will not be recommending a final dividend payment for the financial year 2016 and said the dividend policy for 2017 and beyond will be set out following a full review of the group's financial situation.Preliminary results for the year to the end of December are due on 2 March.Atif Latif, director of trading at Guardian Stockbrokers, said: "The market is disappointed with this profit target miss, uncertainty re the KC46 tanker contract, the dividend cut and an increase in debt levels. Once again we see this sector showing signs of continual weakness."At 0940 GMT, Cobham shares were down 15.3% to 139.40p.