Market Report: Cobham plunges as defence spending dries upComments Off on Market Report: Cobham plunges as defence spending dries up
Investors in Cobham ran for cover as the aerospace and defence firm’s shares nosedived when it predicted growth would stall this year.
Headwinds in its commercial division at the end of the year compounded the issues in its defence arm, which has suffered as governments slash spending.
Underlying pre-tax profits were up 9% to £280 million on revenues of £2.1 billion — 12% better than the year before. However, the FTSE 250 firm’s annual results fell some way short of analysts’ forecasts, who feared this year might be even tougher.
Liberum’s number-crunchers said they now expect brokers to take out their red pens and slash earnings forecasts this year by as much as 7%.
Promise of a pick-up in earnings in the second-half of this year did little to sway investors and the shares plummeted 24.65p or 9.5% to 234.35p, their lowest in three years — making Cobham the worst performer on the mid-cap index.
The flood of results statements were the main driver of the market and a mixed bag saw the FTSE 100 sink 12.64 points to 6134.42.
Like Cobham, satellite firm Inmarsat was in need of some rocket fuel after its disappointing annual results had investors concerned that this year might be just as tough.
The shares were 44p, or 4.6%, worse off at 922p as the company — which was launched into the FTSE 100 last year — revealed revenues and pre-tax profits had both fallen last year, down at $1.27 billion (£900 million) and $282 million respectively.
Carillion, the LSE’s most bet-against stock, continued to silence the short-sellers hoping for a dismal set of numbers, with revenues up 13% at £4.6 billion and pre-tax profits up 9% to £155 million. The shares were 6.2p firmer at 285.5p.
Nick Roditi, the former hedge fund star best known for managing George Soros’s fund, took advantage of the recent stock market woes at Ocado to tighten his grip on the company. Roditi now owns more than 14% of the supermarket delivery firm, 3.9p off at 247p.
Kevin O’Byrne, the soon-to-be chief executive of Poundland, showed his faith in the budget retailer’s future under his guidance by taking £575,000 of shares to the till. The move failed to lift the stock, which was 1.5p cheaper at 168.5p as investors reacted to the news that Poundland was relegated from the FTSE 250 in last night’s reshuffle.
Punters resisted a flutter on Ladbrokes, down 2.5p at 128.5p, after strong results from Gala Coral, the group it is soon to merge with, pending a verdict from the competition watchdog on betting-shop sales.
Failed Polish shale gas venture 3Legs — whose shares remain suspended on AIM — confirmed the £8.8 million reverse takeover of SalvaRx Group, serial investor Jim Mellon’s lifesciences group, alongside a £1.95 million share placing.