Analysis of 10 companies of aerocpace and defance sector

The analysis consists of 10 different companies. They operate in aerospace and defence sector and we investigated companies’ capital growth and dividends expected in section A (i). In section A (ii) we have discussed external ; internal risks expected to the companies. We analysed the dividend yield ; P/E ratio of the companies in section B. And finally we have compared the aerospace ; defence sector with FTSE All Share Index in section C.

In this section we are analysing capital growth and dividend expected of the ten given companies of aerospace ; defence sector with the help of five years historical share price charts ; tables which contain five years historical data of EPS ; dividends. 1.BAE Systems Plc BAE Systems is providing products and services for land, air and naval forces, customer support services, electronics, I.T. products, Integrated Systems ; partnerships, customer support services ; HQ business. BAE Systems’ sales exceeded GB 15.71 billion in 2007. (BAE Systems Annual Report 2007)

As per analysis of share prices(last five years) it given a rise of overall 250% to 490.0p (2003 140.0p) per share. As they performing well in the sector and they are continuing there strategies and due to global political condition we can see the same growth in future as well. As per analysis of earnings per share (last five years) it given a rise of overall 56.6% to 26.0p . It also gives a rise in EPS of 31% in 2007, EPS was 26.0p. EPS is quite good from 2003 – 2007and it’s expected to high in coming years. 2. Chemring Group Plc Chemring group is the world’s leading producer of expandable decoy countermeasure for protecting air, sea and land, the leading supplier to the US military. All three businesses had a record year in 2007, resulting in a 37% increase in the operating profits of this division to 33.9 million. (Chemring Group Annual Report 2007)

As per analysis of share prices(last five years) it given a rise of overall nearly 600% 2450.0p (2003 355.0p) per share. As they performing well in the sector and they are continuing there strategies and due to global political condition we can see the same growth in future as well. As per analysis of earnings per share (last five years) it given a rise of overall 273.3% to 112p . It also gives a rise in EPS of 55% in 2007, EPS was 112p . EPS is quite good from 2003 – 2007and it’s expected to high in coming years. Company strategy has already proved very successful, with over 200% earnings and dividend growth in both of the last five years.

Cobham Plc Cobham plc is a global company involved in the delivery support ; development of aerospace and defence systems on land, in the air, in space and at sea. They are running their business through technology and service division. (Cobham Plc Annual Report 2007) As per analysis of share prices(last five years) it given a rise of overall nearly 80% to 209.0p (2003 116.7p) per share. As they performing well in the sector and they are continuing there strategies and due to global political condition we can see the same growth in future as well.

As per analysis of earnings per share (last five years) it given a rise of overall 40% to 13.09p . It also gives a rise in EPS of 12% in 2007, EPS was 13.09p. EPS is quite good from 2003 – 2007and it’s expected to high in coming years. As per analysis of dividends (last five years) it given a rise of overall 70% to 4.5 (2003 2.64). And it is expected to be maintaining in coming years. Meggitt Plc The company manufactures designs high integrity components & systems for the aerospace & defence & electronics sectors worldwide. The group has excellent business balance & gross R&D investment of 70.0m (2006: 57.6m). (Meggitt Plc Annual Report 2007)

As per analysis of share prices (last five years) it given a rise of overall nearly 100% to 280.0p (200 140.0p) per share. As they performing well in the sector and they are continuing there strategies and due to global political condition we can see the same growth in future as well. As per analysis of earnings per share (last five years) it given a rise of overall 50%, it also give a rise in EPS of 11.5% in 2006, EPS was 22.3p . The Board is proposing an increase in the final dividend of 12.1% to 5.75 pence, bringing the full year dividend to 8.20 p, an increase of 11.4 %.(Meggitt Annual report 2007)

Qinetiq Group Plc Qinetiq is a global security & defence technology company. They have built up significant intellectual capital and expertise. (Qinetiq Group Plc Annual Report 2007) Source: Reuters 2008 As per analysis of share prices (last two years) it given a fall of overall nearly 13% to86.0p (20065.0p) per share. As they performing well in the sector from last year and there share prices are rising in this year we can be hope full for there future but not like other companies within the sector.

As per analysis of earning per share (last two years) it given a rise of overall 5% from continuing activities, it also give a rise in EPS of 11.5% in 2007, EPS was 5% (2006 10p). Rolls-Royce Group Plc The company is providing services & power systems for use at sea, on land and in the air, they operate in global markets like defence & civil aerospace, energy & marine. (Rolls-Royce Group Plc Annual Report 2007) As per analysis of share prices (last five years) it given a rise of overall nearly 345% to per share. As they performing well in the sector and they are continuing there strategies and due to global political condition we can see the same growth in future as well. As per analysis of earnings per share (last five years) it given a rise of overall 118.5%, it also give a rise in EPS of 14% in 2007, EPS was 34.0p .

Smiths Group Plc Smiths Group is a international innovative company. Delivering a full range of advanced technologies. (Smiths Group Plc Annual Report 2007) As per analysis of share prices (last five years) it given a rise of overall nearly 43% to 1000.0p (2003 700.0p) per share. As they performing well in the sector and they are continuing there strategies and due to global political condition we can see the same growth in future as well.

As per analysis of earnings per share (last five years) it given a rise of overall 135% ,it also give a rise in EPS of 13% in 2007, EPS was 47.0p . The basic earnings per share from continuing activities were 36.9p. The loss in EPS (2006-2007) was by the effect of the share consolidation in June following the disposal of the aerospace business. Finally, returning to the performance of the 2007, in increase of sales by 5%. Hence earnings per share increased by 13%. Due to that performance the company is recommending an increase in the dividend of 8.5% to 34.0p from 31.3p (2006).

VT Groups Plc The VT Group is a large shipbuilding & support services company supplying products and providing services to US DOD, UK MOD and different governments globally. The group has a turnover of around 650 million.  As per analysis of share prices (last five years) it given a rise of overall nearly 167% to640.0p(2003240.0p) per share. As they performing well in the sector and they are continuing there strategies and due to global political condition we can see the same growth in future as well. As per analysis of earnings per share (last five years) it given a rise of overall 53% from continuing activities, it also give a rise in EPS of 5.8% in 2007, EPS was 25.4p (2006 24p .

Umeco Plc Umeco has engaged in innovation, supply chain management, distribution and & overhaul services to the aerospace & defence sector. There are three parts within the business, Umeco components, composites, repair and overhaul. (Umeco Plc Annual Report 2007) As per analysis of share prices (last five years) it given a rise of overall nearly 278% to 680.0p(2003 80.0p) per share. As they performing well in the sector and they are continuing there strategies and due to global political condition we can see the same growth in future as well.

As per analysis of earnings per share (last five years) it given a rise of overall 22.9% , it also give a rise in EPS of 4.2% in 2007, EPS was 32.2p . Ultra Electronics holdings plc Ultra Electronics is a group involving in manufacturing, designing, supporting electronic and electromechanical systems, sub-systems and products for defence and aerospace applications worldwide. (Ultra Electronics Holdings Plc Annual Report 2007)