Defence and aerospace business Cobham (LON:COB) has announced its plans to reinstate a progressive dividend, despite latest reports of a fall in profits.
The british manufacturing company based in Dorset said that over the 12-month period to 31 December, underlying operating profits dropped to £196 million from £213.1 million a year prior.
Revenue came in at £1.86 billion, but was impacted by divestments and “adverse” currency translation, the company said.
Cobham has, however, outlined its intention to reinstate a progressive dividend, with full-year dividend expected to be 1.0p a share. It overall expectations for its 2019 progress remains unchanged.
The FTSE 250 company is the third largest defence firm in the UK behind Rolls Royce (LON:RR) and BAE Systems (LON:BA).
“We can see the benefits of our improvement actions starting to come through across most of the business, particularly so in Mission Systems. However, Advanced Electronic Solutions underperformed. We have strengthened its management, increased the focus on execution and formulated an overhead cost reduction plan,” Cobham Chief Executive Officer, David Lockwood, commented.
“We have also set out a new capital allocation policy, which establishes a prudent approach to gearing and prioritises organic investment. We anticipate resuming dividend payments with our next interim results,” he continued.
He said that the board’s expectation for progress this year remain unchanged, and continues “to believe that there are considerable opportunities to improve the performance of the Group over the medium term and our continuing focus on customers, culture, operational improvement, business simplification and cash will allow us to realise this potential.”
In February, Cobham said it would take an additional £160 million profit hit following its settled dispute with the aircraft giant Boeing (NYSE:BA). The dispute over its delayed KC-46 refueling program comprised of £86 million relating to settlement of the dispute, and £74 million in additional costs to complete the contract.
At 09:44 GMT Thursday, shares in Cobham plc (LON:COB) were trading at -2%.
