Closing FY23 orders highlight group attractions
Finland joining NATO; the leak of classified US documents relating to the war in Ukraine; recent Chinese military drills around Taiwan: defence-related news flow has remained prominent in areas of present military tension.Following a strong first half, Cohort PLC itself is closing FY23 with contract extensions at MASS and CHESS totalling c. £30m over periods of up to 7 years, with a focus on e-warfare.
We noted at the Interim that over £80m of orders deliverable in the second half equates to 95% coverage of our FY23 year revenue outlook of £165.0m, and order intake of £88.6m resulted in a record closing order book of £304.2m. Following that strong H1 performance, we raised our FY23 outlook by 3% to £165m (+20%YoY) and maintained our (adj.) EBITDA outlook of £22.0m (+13.1%YoY).
Cohort trades on a current FY EV/EBITDA of 8.1x and for FY24 (E) just 7.5x so our Fair Value remains at 650p/share.
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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