Cobham (COB) 160.1p

Gain to date: 11.2%

Original entry price: 143.9p, 23 Jun 2016

When adding aerospace and defence firm Cobham (COB) to our Plays of the Week portfolio we noted upcoming interims would make for lousy reading but expressed a hope this would not do further damage to a depressed share price.

In reality the numbers (4 Aug) did prompt a wave of profit taking. We are still in the money on our hypothetical trade but not to the extent we had been.

The company posted a statutory pre-tax loss of £38 million in the first half, compared to a £4 million pre-tax profit in 2015. Total group revenue fell from £1.05 billion last year to £917 million, driven by divestments and generally weaker trading. Cobham also cut the interim dividend to 2.03p and signalled it expected the total dividend to be around 7.4p per share.

However, recent trading has been supported by a 28% increase in like-for-like order intake, boosted by a significant contract extension with Qantas to continue operations across Australia until 2016.

CEO Bob Murphy says: ‘We have won a number of key contract awards in the first half and notably every one of the sectors has a stronger order book than a year ago.’

With balance sheet issues addressed by a rights issue we continue to like the recovery story here. (TS)