Cobham seen facing battle to hit full-year targets

By Sarah Young

LONDON (Reuters) - A 36-percent drop in first-half profit at Cobham (COB.L) has left the British aerospace and defence company needing a big improvement in the coming months to meet full-year targets, sending its shares down as much as 9 percent on Thursday.

The company, which issued a profit warning in April, said it was confident of a second-half rebound. But analysts said there was no room for error.

"There's a 70 percent second-half profit weighting, execution risks are high and there's new management coming," Liberum analyst Ben Bourne said.

At 0930 GMT, Cobham shares were down 7.4 percent, after touching 152.9 pence, their lowest in more than a month.

Cobham faces execution risks on some of its big programmes in U.S. defence like the KC-46 air-to-air refuelling system.

New chief financial officer David Mellors, meanwhile, is due to succeed Simon Nicholls no later than Jan. 1 2017.

The company launched a 500 million pound emergency rights issue in April after it was hit by delayed shipments in its Wireless communications business and due to lower demand from oil and mining customers for flying services in Australia.

It posted trading profit of 102 million pounds ($136 million) for the six months ended June 30, in line with downgraded forecasts following the April profit warning.

Analysts currently expect Cobham to post a full-year trading profit of 295 million pounds.

CEO Bob Murphy said the company was on the mend.

"We're pleased with the second quarter results. Given where we started the year it's a good recovery and positions us well for the full-year," he told reporters, adding: "We still have a lot of work to do in the second half."

The company's difficult recent performance - the stock has lost over a third of its value since the beginning of the year against a 2 percent fall in Britain's midcap index (.FTMC) - has prompted recent media reports that Murphy could be sacked.

When asked, he said he hadn't been notified of anything: "I'm here I'm doing my job, my job is to deliver second half results and executing the strategy that's been approved by the board," he said.

(Reporting by Sarah Young; Editing by Mark Potter)