Ailing aviation pioneer pleads for £500m help

STRUGGLING engineering giant Cobham is turning to long-suffering shareholders to end spiralling losses.

The air-to-air refuelling pioneer announced a rights issue of £500m as it revealed a 30pc slide in profits.

The appeal had been on the cards since earlier this month when the company issued a fifth profit warning and revealed £811m in write-downs and other charges.

Chief executive David Lockwood, part of a new executive team, said: ‘This is needed to reassure our customers, to give us the flexibility to drive operational improvements and to provide us with a sustainable platform for the future.’

Revenues fell 7.7pc over 2016 from £2bn to £1.9bn and profits fell from £332m to £225m. Debt rose to £1bn, slightly down on the previous year. The board paid no final dividend last year and said it would not recommend paying out this financial year. But investors gave the message a thumbs-up and shares, which have collapsed 66pc in two years, rose 13.4pc, or 16.4p, to 138.6p.

Chairman Michael Wareing said he and the board planned to replace some non-executives over the next two years.

Many problems stem from a purchase in 2014 of US technology business Aeroflex. Earlier this month Cobham announced a £574m writedown at three units connected with the sale.

It also revealed a £150m charge over its KC-46 programme to develop air-to-air refuelling tankers for Boeing.

Lockwood vowed to improve management controls, focus on customers and cut ‘complexity and duplication’.

One shareholder said they were backing the new leadership team who they felt understood the business.