Cohort - Reversing anticipated FY24 tax benefit
In our recent note following the trading update on 26 September 2022, we upgraded our FY24 EPS estimate to reflect an expected cut in future UK corporation tax rates. As the proposed tax cut has now been withdrawn, it is necessary to reverse that adjustment. As a result, Cohort is trading at a still undemanding FY24e multiple of 13.6x and, while falling by 6% to 683p, the DCF value remains at a substantial premium to the current share price.Cohort is a holding company. Co. operates through its subsidiaries: Empresa de Investigacao e Desenvolvimento de Electronica, S.A., which is engaged in the fields of electronics, tactical and naval communications, command and control; MASS Consultants Limited, which is an electronic warfare operational support, cyber security, secure ICT networks and support to operations business serving customers primarily in defense and security markets; and Marlborough Communications Limited, which is a supplier of electronic communications, information systems and signals intelligence technology to the defense and security sectors.
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