Trading update: performance ahead of expectations
In an Update for the year to 30 April 2024 Cohort reports overall performance slightly ahead of market expectations. We note that the Group reports very strong order intake of c.£387m (compared to £218m in FY23) resulting in a closing order book which stood at c.£518m (FY23: £329.1m), inclusive of the March SEA Royal Navy £135m Ancilia contract.The group notes strong H2 performance, with overall growth in the Sensors & Effectors division, notably Chess and SEA, outpacing the Communications & Intelligence division where, as expected, UK MOD orders decreased from the 2022/23 peak, and Portugal continued to experience some contract delays.
Cohort reports good demand from both domestic customers and for exports, noting increased attention to defence spending spurred by conflict in Ukraine and the Middle East, and ongoing tension in the Indo-Pacific region.
The order book now covers c.£180m, i.e. 90%, FY 25 revenue market expectations (FY24 was 84% covered at £145m). We see the momentum established in FY24 continuing into FY25.
At this stage we maintain our outlook to FY25 and a Fair Value of 725p / 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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