DORSET-based defence giant Cobham has signalled its fight back against military spending cuts by forecasting a return to revenues growth by next year.
The business, which is best known for systems that allow planes to refuel in mid-air and antennae for fighter jets, saw half-year profits drop 14 per cent to £118m as a result of the tough conditions in the US defence market.
However, shares rose four per cent after the company stuck by its expectations for the full year and said it was on track to grow organic revenues by mid-single digits in 2015 as a result of efforts to boost its exposure to commercial markets.
This recently saw the company strike the biggest deal in its 80-year history when it paid £548m for US-based Aeroflex, which sells 4G technology and is developing 5G networks for the next generation of smartphones and tablets.
Cobham, which employs 10,000 workers, also makes systems that run radio communications on the Airbus A350 and on yachts in the Volvo Ocean Race.
Chief executive Bob Murphy said Cobham's commercially driven businesses were now the single biggest contributor to revenues, with 38 per cent of the total.
His target for revenues growth next year is also based on a moderating rate of decline in the US defence market and stronger sales from its other regions.
In the current year, Cobham expects revenues to decline by low-to-mid single digits. The figure was four per cent lower in the latest results, with growth of eight per cent in its commercial division offset by falls of 10 per cent in both its US defence and non-US defence markets. Total sales were three per cent lower at £834m for the period.
The group’s order book was also slightly lower than at the end of last year at £2.14bn, while its order intake fell by a quarter to £728m because of the non-repeat of some orders from the prior year period.