FY24: record results and maintained momentum
Cohort reported strong FY24 results, with revenue +11%YoY at £202.5m, which was 8% above our outlook, and (adj.) operating profit of £21.1m +11%YoY (3% above EDE). The closing order book was £518.7m +58%YoY with order intake of £392.1m, +78%YoY, and estimated 95% coverage of our FY25 revenue outlook. The year closed with net cash of £23.1m.National security and spending on defence became an issue of top priority through the course of pre-election campaigning, with the Labour Government indicating that it would increase spending to 2.5% of GDP compared an estimated 2.30% in 2023/24. The Group reports good demand from both domestic customers and for exports, noting increased attention to defence spending spurred by conflict in Ukraine and ongoing tension in the Indo-Pacific region.
Our read-across to the market cap-weighted average of peers leads us to raise our Fair Value / share to 910p from 725p.
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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