Cobham share price rises as turnaround plan kicks in

Shares in defence company Cobham (LON:COB) rose over 7 percent on Thursday morning, after its most recent set of results showed the company may be beginning to recover.

Cobham has issued five profit warnings over the past two years, with CEO David Lockwood initiating a turnaround programme after a disastrous end to 2016. Its half year results for 2017 showed promise however, with the group reporting a £14.3 million pre-tax profit and reversing a £38.4 million loss a year ago.

Revenue came in 9.5 percent higher at £1 billion, with net debt decreasing to £460.8 million from £877.2 million the year before. Basic earnings per share climbed to 0.8 pence.

Whilst CEO David Lockwood said the group had made progress in the first six months of the year, he reiterated that it was “in the early stages of implementing a challenging turnaround”.

He added: “Cobham has a number of high quality businesses with differentiated technologies and know-how and leading positions in a number of attractive markets. This gives us confidence in Cobham’s future”.

Lockwood announced a strategic review into the business at the beginning of this year, as well as a £500 million rights issue to get the £1 billion debt pile under control.

The first half results were in line with expectations, but investors were cheered by the performance. Shares are currently are 6.64 percent at 142.90 (1000GMT).