Cobham hit by US defence spending cuts

Strained US defence budgets have hit another British manufacturer, with missile launcher maker Cobham suffering a 38 per cent crash in full-year pre-tax profit to £127 million.

The 80-year-old group joins military aircraft engineer Meggitt, engine-maker Rolls-Royce and defence champion BAE Systems in a who’s who of UK manufacturing wounded by budget cuts at the Pentagon.

Chief executive Bob Murphy today warned that “trading conditions are expected to remain challenging in 2014”, with yet more pressure on security and defence budgets over the pond.

However, investors were treated to a 10 per cent dividend hike and will receive 9.68p for every share they own in the group. Revenue was also up 2 per cent to nearly £1.8 billion, but Murphy warned Cobham’s sales — boosts from any acquisitions aside — was likely to decline by "low-to-mid single digits" this year.

Concerns over the Dorset-based group’s recent decision to self-report to the Department of Justice remain over "potentially" irregular sales practices at its tiny satellite tracking systems arm TracStar in Asia last month.

Shares in the firm today rose 5.8p to 306p.