Cobham is a well managed aerospace specialist which has grown steadily for a number of years, both by acquisition and organic growth. It has assembled an array of high-grade defence and aerospace franchises in air refuelling and communications. The market had been anticipating a weaker set of results than I thought fair and I was glad to see this come right with a share price rally in August. The company’s management, whom I regard highly, stated that they expect “a greater weighting of earnings to the second half, with full year organic revenue growth in line with previous guidance”. The Group is well placed to benefit from what appears to be a turnaround in the US and European defence budgets. Of particular interest is the increased appetite for air refuelling aircraft, an area in which Cobham are world leaders, their most notable client being the antiquated, but sizeable US air force fleet. The Group has an exceptional record of growing their dividend and is currently at a c.12% discount to its European peers.
A member of John Royden’s family is a beneficial owner of Cobham.