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03 Mar 2011. Cobham Preliminary Results year end 31 December 2010.
2009 2010 Change
Order intake £1,750m £1,799m +3%
Total revenue £1,880m £1,903m +1%
trading margin 17.9% 18.3% +0.4%pts
profit before tax £ 295m £306m +4%
profit before tax2 £ 245m £189m
earnings per
share (EPS) 18.8p 19.7p +5%
Basic EPS 16.3p 13.3p
cash conversion 89% 79%
Full year
dividend per share 5.45p 6.00p +10%
*Order intake in Technology Divisions4 up 7% at constant translation exchange rates and important awards on long term programmes
*Underlying EPS growth of 5% with efficiencies of over £10m, including savings from the on track Excellence in Delivery programme.
*£219m of free cash flow and year end net debt/EBITDA down to 0.8 times
*Recommended 10% increase in dividend for the year and share buy-back programme of up to £150m
*Acquisitions strengthen presence in homeland security market with completion of three bolt-in acquisitions totalling US$175m in 2010 and early 2011
*Aerial refuelling systems selected on important new US Air Force KC-46A tanker aircraft in early 2011
Commenting on the results and outlook, Andy Stevens, Chief Executive Officer, said: “We have delivered 5% underlying earnings growth in challenging markets. Good revenue growth in certain Strategic Business Units was masked by order slippages on significant defence and security programmes and some continuing softness in certain commercial markets. We have made encouraging progress on Excellence in Delivery and achieved cost savings which have contributed to earnings growth from flat Group revenue. We continue to see challenges in some of our markets and uncertainties as the Continuing Resolution impacts the funding of US Government spending. As a consequence, the rate of revenue growth in our Technology Divisions remains at the level experienced during 2010. We have configured the business with a prudent view of top line growth for the current year and have already accelerated integration plans to deliver £21m of cost savings in 2011. We continue to have strong long-term positions in attractive markets with superior growth and are focusing our technology investment and acquisition strategy in areas of customer priority. This approach, together with customer and cost benefits from our operational improvement plan, gives the Board confidence that the Group will continue to make progress over the medium term.”
The Group order book had increased at the year end to £2.5bn (2009: £2.4bn) with the increase attributable to the Technology Divisions. In all three Technology Divisions there has been improved order intake, with an aggregate 7% increase in orders received at constant translation exchange rates. The Group has been selected on a number of important new multi-year programmes and platforms and has also won further work on existing platforms, which will result in incremental orders being placed over many years. These include the CH-53K helicopter, the
Aegis surveillance and fire control radar system, the F-35 fighter aircraft and the US Missile Defence Agency Support Services (MiDAESS) umbrella contract. In addition, consistent with increased business development focus, Cobham has continued to win positions in faster growing geographies, with awards on the Chinese C919 commercial aircraft, the Indian Air Force Hawk advanced jet trainer, the indigenous Korean Utility Helicopter and significant programmes in the Middle East. Despite good underlying progress in many of their markets, the overall growth in both Defence Systems and Avionics and Surveillance was impacted by delays in certain significant US defence and security awards, with continued softnes

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