Engineering news
Defence firm Cobham has reported an 81% fall in pre-tax profit to £24 million for the year ended 31 December following costs associated with its acquisition of US communications firm Aeroflex.
The Dorset-based company, which is best known for systems that enable aircraft to refuel in mid-air and antennae for fighter jets, posted a 9% increase in revenue to £1.85 billion for the 12-month period. Order intake increased by 10% before the acquisition, Cobham said.
The company said its trading profit, which fell 10% to £287 million in the year, was hit by a change in product mix, its aerial refuelling development programme performance, and unfavourable exchange rates.
Bob Murphy, chief executive, said: "In 2014 we made significant progress on the delivery of Cobham's strategic objectives. Completing the Aeroflex acquisition was a key highlight, increasing the group's exposure to growing commercial markets, and Aeroflex's post acquisition trading and integration has been in line with the board's expectations.
"The year also included a number of challenges. Although Cobham delivered good order intake and saw the expected overall improvement in revenue in the second half, the group's revenue mix has changed over time. There has been a decline in the higher margin shorter cycle businesses which are exposed to land related defence and security markets. This has been largely offset by an increase in lower margin engineering and development revenue.
"Additionally and as previously announced, due to the identification of a limited number of technical maturity issues, the group recognised a £15 million provision relating to its aerial refuelling development programmes. We remain confident that these programmes will be delivered in line with our current projections and will lead to significant streams of production and aftermarket revenue over an extended timeframe.
Murphy added: "Overall we have made significant progress on the delivery of our strategic objectives in 2014 and, as anticipated, Cobham remains well positioned to deliver mid-single digit organic revenue growth from 2015."
Cobham, which employs 10,000 workers, also makes systems that run radio communications on the Airbus A350 and on yachts in the Volvo Ocean Race.