UK company's success based on growing order book and lucrative takeovers
Aerospace and defence group Cobham plans further acquisitions in 2005, having boosted its 2004 profits through a combination of a growing orderbook and takeovers worth £61 million ($117 million).
The UK company has posted a year-on-year increase of more than 18% in its 2004 revenue and seen its orderbook grow nearly 15%, topping £1 billion for the first time, in part because of the orders taken on with companies the group acquired.
So far in 2005 Cobham has agreed to acquire US-based companies Remec Space & Defense for $260 million and H Koch for $63 million, as well as three smaller companies in Finland, France and the UK. Chief executive Allan Cook says the company is "always looking for companies that add strategic value to our portfolio", adding: "There is a very good probability that more acquisitions will be made this year".
Cobham's profit before tax rose 8.6% to £147 million in 2004, having absorbed the £11 million impact of the weak dollar.
Operating profits were up in two of Cobham's three business units, Flight Operations & Services and Chelton, but its Aerospace Systems unit saw a drop of 6% to £62.2 million. Although strong growth in UK air refuelling, countermeasures and life support helped the division's revenue, which grew 21% to £386 million, other factors including development costs for the Airbus A380, start-up losses in the US countermeasures business, a dip in Eurofighter Typhoon revenues, restructuring costs and the impact of the weak US dollar stifled profit margins, Cobham says.
Cook says Cobham considers it "very, very important to maintain continued ongoing investment into product development and technology". The company is investing in development of equipment for the Boeing 787 programme, and R&D spending could increase further. "I would be very surprised and disappointed if we were not part of the A350 supply chain," Cook adds.
HELEN MASSY-BERESFORD/LONDON
Source: Flight International