Cobham plc (lon:cob)
Cobham Are They Settled At The Current Level?


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Title: Cobham Are They Settled At The Current Level?
Company: COB - Cobham plc
Share Price Then: 143p
Author: Ian Smith
Date: Fri 04 Aug 2017
Comments: Cobham came to my attention as they have dropped and stayed at about half of the 300p price they were at in 2014/2015.

The latest interim report looks positive with a halving of debt to £460m and a real profit of £34m rather than a £12m loss.

The you realise that there was a 2:5 rights issue that raised about £500m and the warm glow disappears a bit, especially when most of the money went to debt reduction.

I understand it when a well established company needs new share holder funds for new projects but alarm bells ring when a current holding is diluted by 40% and the money is used to pay of debt

The report says
In summary, we have concluded that Cobham is best placed to generate value when it focuses on its defence and commercial aerospace markets, in which it designs and delivers services, systems and products.

It gets even more worrying when we see

has been significantly strengthened with the following new appointments:
· Admiral Steve Abbot USN (retired) - former Deputy Commander in Chief US European Command;
· General Mike Hagee USMC (retired) - 33rd Commandant of the US Marine Corps and Non-executive Director on the Cobham plc Board;
· Cindy Moran - President and managing partner of IT consultancy, Pikes Way LLC, and former Director of Network Services, US Defense Information Systems Agency;

Okay there were still £0.9b of new orders but I do have concern that BrExit may mean that there is political pressures to keep state funded projects within the EU.

This could eat heavily into new orders not just from 2019 but from now as it becomes clear that the UK is leaving the EU.

Is this all just too cosy, we’re on the government projects gravy train so it will be alright in the end?

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