Cohort reports record first half
By Josh White
Date: Wednesday 11 Dec 2024
(Sharecast News) - Independent technology company Cohort reported record half-year results on Wednesday, with significant growth in revenue, profit, and its order book.
The AIM-traded firm said revenue rose 25% year-on-year in the six months ended 31 October to £118.2m, driven by higher sales to the UK Ministry of Defence, particularly within the communications and intelligence division.
Adjusted operating profit surged 69% to £10.1m, reflecting improved margins of 8.5%, up from 6.4% in the prior year, while adjusted earnings per share nearly doubled to 20p.
Cohort's order intake increased to £139.2m, while its closing order book reached a record £541.1m, providing strong visibility for future revenue.
Over £120m of the order book was expected to convert to revenue in the second half of the year, covering more than 99% of consensus forecast revenue for the full year.
Both of the group's divisions - sensors and effectors, and communications and intelligence - delivered strong growth, with the sensors and effectors division more-than-doubling its adjusted operating profit from the prior year.
Notable contributions came from EID, which secured significant orders within the communications and intelligence division.
Cohort also continued to strengthen its portfolio through acquisitions, having recently completed the takeover of Interactive Technical Solutions, which had been integrated into the communications and intelligence division.
Additionally, the conditional agreement to acquire EM Solutions, announced in November, was expected to be completed shortly.
That acquisition was projected to be materially accretive to adjusted earnings per share from 2025-2026.
The board increased the interim dividend by over 10% to 5.25p per share.
Net funds stood at £37.9m, significantly ahead of expectations due to strong working capital flows, including customer advances.
Cohort said it anticipated a stronger second-half performance, particularly from increased delivery within the sensors and effectors division.
With an order book extending into the mid-2030s and positive medium-term growth prospects, the board said it remained confident in its outlook.
"Cohort delivered a much stronger performance in the first half compared to the same period last year, with growth in both revenue and adjusted operating profit," said chairman Nick Prest.
"Continued strong order intake has driven a record closing order book which underpins most of the second half of this financial year. In line with previous experience we anticipate a stronger performance in the second half and we remain on track to achieve our expectations for the full year.
"The continued expansion of the order book is a strong indicator that we are offering competitive products in a growing market."
Prest noted that on-order revenue was now deliverable out to the mid-2030's.
"The pipeline of order opportunities for the remainder of the year also looks strong.
"Demand for our solutions and services continues to be driven by heightened international tensions in the Asia-Pacific region as well as conflict in Europe and the Middle East.
"This backdrop is driving increased spending on defence and security. Overall, we continue to see a positive outlook for organic growth in the years ahead."
At 0932 GMT, shares in Cohort were up 5.88% at 1,080p.
Reporting by Josh White for Sharecast.com.
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