Military growth

Cobham has reported a 32 per cent increase in first-half profits following a number of strategic investments in military and government markets.

The aerospace and defence electronics group saw revenue for the first six months of the year increase by more than 50 per cent to £952m, which it said was boosted by acquisitions and favourable exchange rates.

Trading margin rose by 17 per cent and the company reported an organic margin improvement of 1.8 per cent as a result of ongoing operational efficiencies.

Overall group trading profit increased by 51 per cent to £162m, up from £107m a year earlier, and basic earnings per share increased from 5.5p to 9.3p. Order intake rose nine per cent to £893m, resulting in an order book at the end of the period of around £2.4bn compared with £2.7bn a year earlier.

The group’s military and government technology business reported good growth with organic revenue up by seven per cent, but revenue from commercial activities fell by 13 per cent, resulting in a modest one per cent organic growth in its technology division.

However, the company said that its work with M/A-COM, which it acquired from Tyco Electronics in September 2008, had resulted in increased technology collaboration and new contract awards. As a result the company is positive about the year ahead.

Allan Cook, Cobham’s chief executive, said: ‘We have seen good levels of organic growth in our military and government businesses in the first half, although this has been partly offset by the anticipated subdued activity in the defence communications and mission equipment businesses, as well as by the generally unfavourable conditions in our commercial markets.

‘Our core military and government markets continue to be healthy and revenue from vehicle intercoms should increase in the second half. The board expects to achieve further progress in the full year with increased levels of organic revenue growth from the technology divisions and remains confident of high single-digit organic revenue growth over the medium term.’