05 Mar 15. Cobham became the latest defence and aerospace company to point to an improving outlook for military spending, as it confirmed it was on track to return to revenue growth in 2015. The FTSE 250 company, which relies on the US defence and security sector for a third of its sales, on Thursday reported an 11 per cent fall in underlying full-year pre-tax profits to £257m, from £288m a year ago, on the back of a weak defence market and strong pound. On a statutory basis, pre-tax profits plummeted 81 per cent to £24m, from £127m in 2013, because of a number of one-off charges, including a £114m amortisation expense. It comes after a difficult period for the British engineering company, which has seen profits decline rapidly because of weak military spending. Defence makes up about 60 per cent of the group’s overall revenues. However, it became the latest group to strike a more upbeat tone on prospects for military spending. Last month UK defence group BAE Systems said the eight-year downturn in US military cuts appeared to be at an end. On Thursday, Cobham said there were signs certain countries in eastern Europe were increasing their defence budgets, driven partly by the uncertain political environment. Spending in Asia, the Middle East, Australia and parts of South America were also growing. It added that in the US, there are indications that military spending is beginning to stabilise with the “adverse impact on group revenue slowly moderating”. However, it warned that there remains “residual risk and uncertainty in this market, with the potential for further significant disruption and cuts in 2016 unless timely action is taken by Congress to avoid the mechanism of sequestration that is currently mandated”. But the British engineering company reiterated that it remains well positioned to deliver mid-single digit organic revenue growth in 2015. Group revenues rose 3 per cent to £1.85bn, up from £1.79bn in 2013, driven by its recent acquisitions. However, on an organic basis, revenue was down 2 per cent following a fall in revenues in both its US and non-US defence markets. Revenues were also hit by a strong pound, which took £85m off full-year sales. Nick Cunningham, analyst at Agency Partners, said the main risk for Cobham was another squeeze on short cycle defence in 2016 if the US budget goes into sequestration and election posturing delays the 2017 budget. Cobham has spent the past few years diversifying away from defence and increasing its exposure to the commercial sector, which now makes up about 39 per cent of the group’s revenues compared with just 27 per cent in 2011. Its strategy was boosted last year when Cobham acquired Aeroflex, a New-York based rival, for an enterprise value of about $1.5bn. The deal was the largest in Cobham’s history and represented a big push into higher-growth commercial markets in microelectronics and wireless civil communications. (Source: Google/FT.com)
04 Mar 15. CPI Aerostructures Announces 2014 Fourth Quarter and Year-End Results.
* Ended 2014 with funded backlog of $120.6m, up $10.2m for the year
* In 2014, received $92.9m in new contract awards for commercial and defense programs
* 2014 commercial revenue of $36.9m, up 37.6% as compared to 2013 commercial revenue
* 2014 year-end results included a one-time, non-cash charge related to the A-10 Wing Replacement Program (WRP)
* Reaffirms 2015 guidance: record revenue of $92.0m – $102.0m; net income of $7.2m – $8.0m
* In 2015, expects to realize approximately $9m in tax refund and over $5m in tax loss carry forwards related to the A-10 WRP
CPI Aerostructures, Inc. (“CPI Aero®”) (NYSE MKT: CVU) announced financial results for the fourth quarter and year ended December 31, 2014.
Fourth Quarter 2014 vs. Fourth Quarter 2013
* Revenue was $20,067,439, compared to $21,285,992;
* Gross margin was 21.3%, compared to 24.8%;
* Pre-tax income was $2,113,259, compared to $3,376,242; and,
* Net inco