FTSE 250 firm says profit will be 11% lower than previous expected
Companies: Cobham
Shares in British manufacturer Cobham Plc fell nearly 20% as the market opened on Wednesday, after the firm warned investors that 2016 profits would fall below previous expectations and confirmed it was pulling its final dividend.
In a trading update for the year ending 31 December, the company said Group profit was expected to be £245m, below the previously expected range of £255-£275m.
As a result of this performance, and a higher than expected net debt, the firm says it will not be recommending a final divi for FY2016 and is reviewing its 2017 dividend:
"The dividend policy for 2017 and beyond will be set out following a full review of the Group's financial situation."
Worryingly for investors, the new management team is in the process of auditing the results and said there is "significant uncertainty" surrounding the KC-46 tanker programme, which could impact the bottom line further:
"The detailed year end close and audit is ongoing but is not expected to result in an increased trading profit. The new management team is commencing a thorough closing balance sheet review, including major contracts and asset carrying values. The trading profit disclosed above is before any adjustments that may arise from this review and, in particular, there is significant uncertainty surrounding the outcome of the KC-46 tanker programme."
At the time of writing, shares in Cobham had regained 5% from the initial fall.
