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BUSINESS NEWS

04 Mar 08. EADS shares soared more than 9 per cent yesterday as investors celebrated its surprise victory over Boeing to win a $35bn order to build refuelling tankers for the US air force. Taken alone, it is a huge defence contract worth an estimated $40bn and involving 179 aircraft. It includes the procurement of about 15 Airbus A330 jets a year, and service and support revenues. However, the European aerospace group is now also in a strong position to capture a large share of the remaining 400 tankers that the US needs to replace, a contract that could ultimately be worth $100bn. It has so far already been more successful than Boeing in securing other export orders. Together with Northrop Grumman, its US partner, EADS is expected to start delivering a modified version of the A330-200 in 2010 and reach full production in 2014.
This should “help insulate Airbus in the next delivery downturn,” said Morgan Stanley, the investment bank. Under the terms of the contract, EADS will move final assembly of its A330 commercial freighter to Mobile, Alabama. The move will help further reduce currency risk for the company, whose profitability has been undermined severely by the weakness of the dollar against the euro. Louis Gallois, EADS chief executive, has made raising the share of dollar-based activities outside Europe to improve protection against foreign exchange volatility a key element of his strategy. (Source: FT.com)

06 Mar 08. Cobham on Thursday reported a 12.9 per cent increase in pre-tax profits and said it was confident of achieving its growth targets for 2008 due to a strong order book and the healthy state of its markets. The UK aerospace and defence group recently won a supply contract for an aerial refuelling tanker being built for the US Air Force by Northrop Grumman and EADS. The contract could fetch up to $1bn for Cobham and Gordon Page, chairman, said in a statement that it was “a strategic win that will embed us on another high technology programme and help us enhance our future growth further”. Cobham said that its order book had increased by £163.2m last year, down from the £215.1m increase it reported in 2006. Revenue rose by 4.5 per cent last year to £1,061.1m. “Given the strength of the order book and the healthy state of our markets we are confident of achieving our growth targets in 2008,” Mr Page said. Cobham’s underlying profit before tax, stripped of special items, rose by 12.9 per cent to £206.5m. Underlying earnings per share were 13.09p and it recommended a 4.50p dividend per share, up 20 per cent from 3.75p last time. The company said that it had made “sound progress” in the execution of its acquisition strategy since the start of 2007, and had agreed to buy five businesses for about $750m. The acquisitions significantly boosted the group’s presence in the US, which it said was worth 54 per cent of its revenue last year or $1.4 bn. Cobham’s said it was confident it could complete further acquisitions in the pipeline, but would only do so “where this creates value for shareholders”. The Group has taken advantage of healthy demand across its markets and ended the year with an order book of some £1.8bn (2006: £1.6bn) which underpins future revenue growth. The order book for both the Technology Divisions at £0.8bn (2006: £0.7bn) and Cobham Aviation Services at £1.0bn (2006: £0.9bn) increased strongly. Headline order intake at £1.2bn (2006: £1.4bn) was down on 2006 due to more than £0.3bn of orders received by Cobham Aviation Services in 2006 relating to the Sentinel contract. Excluding Sentinel, Group order intake increased 11.9% over the prior year. Each of the three Technology Divisions increased their order intake during the year with the book to bill ratio being in aggregate over 1.1 times. (Source: FT.com)

06 Mar 08. DCN Results. After winning the FREMM and Barracuda contracts in 2005 and 2006 respectively, DCNS booked orders worth €1.9bn in 2007. The main orders included the fi

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