Cobham plc AGM Statement and Trading Update (1504M)

TIDMCOB

RNS Number : 1504M

Cobham plc

26 April 2018

26 April 2018

Legal Entity Identifier: 213800A41R9NL49E5632

AGM Statement and Trading Update

Cobham plc ('Cobham' or 'the Group') today issues a trading update covering the period 1 January 2018 to 31 March 2018. The statement is issued ahead of Cobham's 2018 Annual General Meeting (AGM) to be held today.

Progress in the Year to Date

Overall, the Group's trading performance in the first quarter of the year for the ongoing business was in line with the Board's expectations with continued execution of Cobham's operational turnaround.

There remains a focus on mitigating the material risks and uncertainties facing the Group, including its onerous contracts and other legacy issues. In this respect, Cobham continues to support qualification and flight test on the challenging KC-46 tanker programme under its development and low rate initial production contract which, as previously stated in the 1 March 2018 preliminary results announcement, contains some significant terms related to delayed performance.

The Aviation Services Sector's UK Defence Helicopter Flying School contract concluded on schedule at the end of the first quarter of 2018.

Divestment Completed

As previously announced on 16 March 2018, Cobham completed the divestment of its AvComm and Wireless test and measurement business for an all-cash consideration of US$455m (subject to certain post-completion adjustments and expenses). The transaction completed sooner than expected due to the early termination of the US Hart-Scott-Rodino anti-trust review process. The business delivered a small underlying operating loss in 2018 whilst still owned by Cobham.

Net Debt

Following the divestment, US$573m of private placement debt (senior notes) were repaid on 17 April 2018 and the Group has also repaid and cancelled a US$75m credit agreement. The resulting total accelerated interest costs ('make-wholes') were approximately US$29m and the Group's annualised interest saving on its debt is estimated to be US$26m.

Board Changes

As previously announced, René Médori, who joined the Board on 1 January 2018, will become Non-executive Chairman of the Audit Committee on conclusion of the AGM today, following the retirement from the Board of Alan Semple. General Michael Hagee (retired) and Birgit Nørgaard will also retire from the Board today. The Board is extremely grateful for the contribution of the three outgoing Non-executive Directors.

Outlook

The Board's expectations for the ongoing business in 2018 remain unchanged from those set out on 1 March 2018. There continues to be a range of potential outcomes, although the early completion of the Wireless and AvComm divestment has removed one factor from the 2018 performance. As previously announced, the Group anticipates limited cash generation in 2018. This is partly due to the pattern of receipts and payments relating to its onerous contracts with a weighting of cash outflows in H1 2018. The Board continues to have confidence in the Group's medium term prospects.

Notice of Results

Cobham's interim results will be announced on 2 August 2018.

David Lockwood, Cobham Chief Executive Officer, said:

"Cobham's turnaround has continued in the first quarter and our overall trading performance within our ongoing business was in line with the Board's expectations. I continue to have confidence in our medium term prospects, supported by a more resilient balance sheet, despite the risks and challenges that remain."

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Enquiries:

 
 Cobham plc 
  Julian Wais, Director 
  of Investor Relations       [phone] 
  MHP Communications 
  Reg Hoare/Tim Rowntree     [phone] 
 

Notes:

1. This document contains 'forward-looking statements' with respect to the financial condition, results of operations and business of Cobham and to certain of Cobham's plans and objectives with respect to these items.

Forward-looking statements are sometimes but not always identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'targets', 'goal', or 'estimates'. By their very nature forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that may or will occur in the future.

There are various factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies, political situations and markets in which the Group operates; changes in government priorities due to programme reviews or revisions to strategic objectives; changes in the regulatory or competition frameworks in which the Group operates; the impact of legal or other proceedings against or which affect the Group; changes to or delays in programmes in which the Group is involved; the completion of acquisitions and divestitures and changes in commodity prices, inflation or exchange rates.

All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to Cobham or any other member of the Group or persons acting on their behalf, are expressly qualified in their entirety by the factors referred to above. Cobham does not intend to update these forward-looking statements.

2. Cobham is a leading global technology and services innovator, respected for providing solutions to the most challenging problems, from deep space to the depths of the ocean. We employ around 10,000 people primarily in the USA; UK and Europe and Australia. We have customers and partners in over 100 countries, with market leading positions in: wireless, audio, video and data communications, including satellite communications; defence electronics; air-to-air refuelling; aviation services; life support and mission equipment.

This information is provided by RNS

The company news service from the London Stock Exchange

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April 26, 2018 02:00 ET (06:00 GMT)