Investors are jumping the Cobham (COB) ship after a third profit warning during the last year. Shares in the aerospace and defence company are trading 16% lower at 134.8p.

The SATCOM and wireless divisions are largely being blamed, underperforming as a result of challenging trading conditions and an apparent deterioration following a first half loss announced in August.

Cobham says demand has been subdued in its maritime SATCOM division, which was offset by limited growth in revenue from Ka band products. In wireless, revenue deferral and additional costs from more resource requirements have affected its performance, as this was slower than expected.

There are also separate troubles at its integrated electronic solutions unit, although this was due to technical issues on specific space-related development programmes. But overall, management has slashed around £50m from its trading profit guidance, to between £255m and £275m.

Cobham graph

JP Morgan believes that 10% to 20% of the new guidance is due to operational issues, although weaker revenue remains the key issue.

Investment banking firm Jefferies says the net debt/EBITDA gearing ratio has risen from 2.3-times to 2.6-times, suggesting a higher proportion of debt to equity, but believes control of cash flow is not lost.

Cobham has attempted to lighten the weight of disappointment by stressing that it expects an improvement in fourth quarter trading through higher volumes, as well as volume growth in SATCOM. The company says its wireless business units will have an ‘encouraging order pipeline’ while integrated electronic solutions will have increased revenue, mainly from delayed development programmes.

In the meantime, investors will be looking to change at the top to brighten Cobham's prospects. Former Laird (LRD) CEO David Lockwood will step in to replace current Cobham boss Bob Murphy no later than January 2017, while David Mellors is due to take the financial reigns from chief financial officer Simon Nicholls on a similar time frame.

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Issue Date: 24 Oct 2016