Aerospace and defence company Cobham reported a 24% rise in first-half profit on Thursday, beating forecasts, and said it expects to be slightly ahead of its growth targets in 2008.
The company said it benefited from robust US military and national security markets, with particularly strong revenue from vehicle intercoms and the UK's future strategic tanker aircraft (FTSA) programme.
"We've got strong positions in buoyant marketplaces, both geographically and by sector," chief executive Allan Cook told reporters in a conference call. "Over 50% of our revenue is generated in the US but we're also seeing opportunities in higher growth markets such as India and the friendly Middle East states."
The firm posted £107m in underlying pretax profit for the six months to end-June, up from £86m last year and ahead of the median forecast of £100.5m given in a Reuters Estimates poll of three analysts.
"Cobham reported another set of excellent results with revenues up 28% year-on-year, earnings above forecast and record cash flow conversion," Dresdner Kleinwort analysts said, adding that the broker is upgrading EPS estimates by 3% for all years.
The company, whose products include special-purpose pods carried underneath military aircraft, radar equipment and interior lighting for aircraft, also reported strong growth in its order book to £2.2bn from £1.7bn last year.
It said that its markets are largely resilient to the impact of a weakening economic outlook.
Shares in Cobham, which have risen over 5% since the start of the year, were up 0.92% at 219.5p by 08.40 GMT.
The interim dividend was increased by 10% to 1.345p a share.
Acquisition drive
Cobham has spent around $1.1bn so far this year in five strategic acquisitions, as it seeks to expand into the faster growing intelligence and homeland security sectors.
"We continue to seek acquisition opportunities in a consolidating industry, which are likely to allow us to further accelerate our strategy," Cook said, adding that it was unlikely that many more acquisitions would have any impact in this year.
Chief financial officer Warren Tucker added that the company still has $600m of debt capacity available for acquisitions. "The areas we're interested in are mostly around intelligence, homeland security, law enforcement, national security and avionics, and we will continue investing in defence electronics once we digest the recent three big acquistions in this area," he said.
By Marc Roca, Reuters.
