Mars mission equipment maker Cobham profits down
Jennifer Trosper, Mars Science Laboratory mission manager, with a model of NASA's Mars science rover Curiosity
Leading defence and aerospace firm Cobham, which made equipment for the recent Mars mission, has reported a drop in profits.
The Dorset-based company, which is best known for making systems that allow planes to refuel in mid-air and antennas for fighter jets, has been affected by lower military spending, particularly in the run-up to the US election.
Cobham, which made antennas for the Mars Rover that landed this week, is looking to offset the downturn through its commercial business. This has been boosted by supplying antennas, oxygen systems and communications kit to aircraft makers.
Its customers include Boeing and Airbus, which are ramping up output this year to meet airline demand for more efficient planes.
Cobham, which employs 11,000 people worldwide, reported a 4 per cent fall in profits to £142m in the first half of 2012 after it sold a defence-focused business in the US.
Strong demand from civil aviation helped its commercial business account for nearly one-third of its revenues in the first half of 2012 – up to 32 per cent from 27 per cent the previous year.
As part of its strategy, it recently bought Danish radio and satellite communications firm Thrane & Thrane, which is mainly geared towards commercial businesses.
There is £96,000 of Cobham kit on a typical Boeing 787 and £192,000 of its equipment is found on an Airbus A380 superjumbo.
The group warned the US presidential elections later this year have the potential to cause delays to orders in the second half of 2012 or even a 10 per cent cut in spending next year, although this is unlikely.
And orders taken in the period were down 21 per cent to £768m, partly driven by the sale of the US business, but even stripping this out, underlying orders still fell 8 per cent lower as it came up against strong comparatives from the previous year.
"We remain positive on the outlook for our commercial and non-US-defence/security businesses, which now represent 60 per cent of revenue," said chief executive Bob Murphy, who joined the group as chief executive from BAE Systems in June.
"The outlook for the US defence/security market for the end of 2012 and 2013 is particularly uncertain due to the upcoming US elections and the lack of political consensus on US government budgets."
Meanwhile, growing sales of military equipment to emerging markets and Asian defence spending is forecast to exceed that of Europe for the first time this year.
The group makes a diverse range of high-tech products, including video transmitters on the helmets of competitors in the winter Olympics and video technology used to guide army bomb disposal robots.
Shares fell today after the group said it expected underlying earnings for the full year to be flat, whereas it had previously expected to make slight gains.
"Africa is abundant with engineering opportunity. We look at some of the projects and the problems."
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