November 4, 2009 9:40 pm

Cobham relies on military strength

Cobham, the defence and aerospace manufacturer, said sales had grown “strongly” over the first nine months, as revenues from military and government customers plus currency effects helped offset declines in its commercial business.

“The board expects to achieve its previous outlook of further progress, with the fourth quarter performance expected to lead to increased levels of organic revenue growth from the technology divisions in the full year,” the company said in an interim statement.

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Analysts at Citigroup expect Cobham to generate pre-tax profits of around £280m ($464m) on revenues of £1.9bn, up 31 per cent and 13 per cent respectively compared with the previous year.

While many defence stocks have underperformed in recent months on fears of budget cuts in the US and UK, Cobham, which is exposed to fast growing niches such as military communication gear, has found favour.

Since the start of the year Cobham shares have risen almost 10 per cent to 225 1/5p, despite news that Allan Cook, the long serving chief executive, will retire in December and David Turner, chairman, will leave next year.

At its interim results in August Cobham picked Andy Stevens, chief operating officer, to take over the top spot when Mr Cook leaves. In its interim statement it said the search for a replacement chairman continued.

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