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Cobham (LSE:COB), Chemring (LSE:CHG) and Senior (LSE:SNR) have help boost the Aerospace & Defence market sector in the last two days. COB share price was up by 2.06% to 247.50, CHG by 2.3% to 274.00, and Senior by 48% to 251.60. All three led the Aerospace & Defence sector, which was up by 0.54% at midday. They also helped the FTSE 250 to gain 0.55%
Cobham issued its interim management statement for the first quarter this morning, indicating that it’s “trading performance” has been “consistent with the full year outlook.” Cobham’s order book stood at £2.4 billion at the close of the quarter, a healthy pipeline by any standards. The company cited, but appeared relatively unconcerned about, a slight increase in net debt, compared to 31 December 2012, from £360 million to £382 million. Most of that increase is due to currency fluctuations relative to the countries where the debt is held.
Cobham has invested £24 million in the UK Future Strategic Tanker Aircraft consortium, which is otherwise largely comprised of private sector companies. This project promises to keep Cobham’s business strong and stable for some time to come.
Chemring share prices rose on the announcement of a new $24 million contract that has been awarded to it’s NIITEK subsidiary in the U.S. The contract awarded to NIITEK, which specializes in Non-Intrusive Inspection Technology, was in addition to a $9 million contract from the U.S. Army already in hand. The orders are part of a $579 million indefinite-delivery and indefinite-quantity contract initially awarded to Chemring in April 2012. Under terms of the contract, Chemring is to deliver spares for a U.S. Army ground-penetrating radar system used primarily to protect soldiers from hidden IEDs.
Senior share price seemed to increase in response to its interim management statement released this morning at 7:00 am. Similar to Cobham, Senior has experienced positive trading so far this year, but has also had to cope with a marginal increase in debt largely due to currency movements. Of significant importance, Senior officials announced that its Aerospace Division, which comprises two-thirds of the entire group sales, “increased at the anticipated healthy rate.” With the light now visible at the end of the tunnel for the Boeing 787’s return to the air, Senior has seen net new order values well ahead of deliveries and 11% higher than at 31 March 2012.
Aerospace & Defense contractors may seem to face an uncertain future, but, then, who doesn’t. One thing we do know for certain, especially regarding military contractors: Although government budgets are tight, it is probable that expenditures on technology, weaponry and equipment will not decline. Plus, there is always the reality that no one really wants to face – that there are wars and rumors of wars around the globe that ensure the need for companies such as Cobham, Chemring and Senior.
