Cobham forks out £160m to end long-running row with Boeing

Aerospace supplier Cobham took a £160 million hit on Tuesday to settle a long-running row with US planemaker Boeing over supply delays.

The UK company, which has struggled in recent years, will pay £86 million compensation to the Chicago-based giant and £74 million to finish work on an aerial refuelling pod.

Shares rose 1% to 117p as the market cheered Cobham for finally drawing a line under the dispute. The row centres on Boeing’s KC-46 air tanker used by the US Air Force to refuel smaller jets mid-air.

Cobham promised to make two refuelling systems for the jets but both were delivered later than expected, annoying Boeing.

The issue had clouded Cobham chief executive David Lockwood’s bid to turnaround the faltering group following a string of profit warnings.

The firm had already booked a £40 million charge last summer due to the delays. Jefferies said today’s news was a “significant step forward”, putting the balance sheet in ruder health, while Investec said potential investors could focus on the “attractive investment case”.

JP Morgan’s aerospace analysts told clients: “We suspect the charge is higher than some expected but the settlement does bring clarity for investors and will mean top management can now better focus on running the rest of the group.”