COBHAM LONDON (Reuters) - British aerospace and defence electronics company Cobham (>> Cobham plc) said first-quarter trading was in line with expectations on Thursday, seeking to reassure investors that it could recover from a string of profit warnings.
A sharp downturn in Cobham's performance over the past year and a half has forced the group to turn to shareholders to raise cash in a rights issue.
Cobham also said last month it was being investigated by the UK's Financial Conduct Authority in connection with its handling of inside information ahead of a trading update and announcement of an earlier rights issue in April last year.
On Thursday it reaffirmed its outlook for 2017, and said that trading in the first quarter had met the board's expectations. It added it would provide an update on a review of the "breadth and shape of its portfolio" in its interim results in August.
Chief Executive David Lockwood, who started in December, has attributed the company's struggles in recent years to weak management, commercial failures and more challenging market conditions.
"The rights issue should do the heavy lifting on the financial position, but the new management team has some way to go to restore the credentials of the company, which at its core retains high quality engineering assets," Andy Chambers, analyst at Edison Investment Research, said in a note.
Cobham said in March that it would raise 500 million pounds ($614 million) in a rights issue to put the company on a stronger footing after a "deeply disappointing" performance in 2016. The company said it would announce the results of the rights issue on May 5.
Shares in Cobham fell 1.1 percent, while engineering firm Meggitt (>> Meggitt plc) dipped 1.3 percent after it also said trading was in line with expectations.
On Wednesday, shares in engineering group GKN (>> GKN plc) dropped after it said the growth rate it has achieved to date may not be sustained as the year progresses.
(The story has been refiled to change the headline).
(Reporting by Alistair Smout; Additional reporting by Kit Rees; Editing by Toby Davis)
