Contract and Trading Update

RNS Number : 0440V

Cohort PLC

27 October 2010

 



 27 October 2010                                                                                                                                       AIM: CHRT

PRESS RELEASE

COHORT PLC ("Cohort")

MASS in Preferred Bidder Team for Shepherd

Trading Update - in line with Board Expectations

Cohort, the independent technology group, today announces a contract and trading update.

MASS in Preferred Bidder Team for Shepherd

Cohort's wholly-owned subsidiary MASS Consultants Limited is part of the team selected as the preferred bidder for the UK MOD's Project Shepherd. This is the project formerly known as the Defence Electronic Warfare Centre (DEWC) Improvement Programme, a strategically important programme for MASS.

If awarded the contract, MASS's advanced data management system will be at the heart of a significant information management upgrade that Shepherd will provide for the DEWC.

Negotiations on contract award are expected to take place over the coming months.

Trading Update

5 months to 30 September 2010

In relation to trading in the current financial year ending 30^th April 2011, Cohort's performance has so far been satisfactory. In the first five months of the financial year MASS performed strongly and SCS returned to profitability following its major restructuring  This has offset a disappointing performance at SEA due to slower than expected order intake. At the end of September the Group had net funds of £1.5m (30 September 2009: £0.5m) and an order book of around £110m (30 September 2009: £54m).

Strategic Defence and Security Review

The Board's initial analysis of the government's Strategic Defence and Security Review, published on 19^th October, is that it is on balance more positive than negative for Cohort. As far as can be ascertained from information published to date, none of the main equipment cuts directly affects Cohort's current programmes.

The positives included the commitment to build seven Astute class submarines, SEA being the provider of the external communications system for these boats. The additional £650m allocated for cyber and the emphasis on intelligence and counter terrorism potentially play to the capabilities of all three Cohort businesses. Both MASS and SCS are well positioned to take advantage of outsourcing opportunities that may result from the planned cuts in MOD and service manpower.

 Set against this, it is likely that MOD spending will continue to be tightly controlled, and that there will be further programme cuts, possibly affecting Cohort, as the detailed consequences of the review are worked out.

SEA

As a result of the slow order intake and disappointing performance at SEA, a review of management and costs is underway. Andy Thomis has taken over as acting Managing Director at SEA for this purpose, combining this position with his role as Group Chief Executive.

Outlook

Based on performance over the first five months the Group is on track to achieve the Board's expectations for the financial year as a whole, but we remain relatively cautious in view of the market uncertainties and the trading position at SEA.

Cohort Chief Executive Andy Thomis today commented

 "I am delighted that Cohort is part of the team that has been selected as preferred bidder for SHEPHERD. It is a demonstration of confidence in MASS's EW data management technology from one of the world's most demanding customers. If the negotiation is successful it will ensure the continuation of our long involvement with this technology area in the UK.

"I am also pleased that the Group's trading performance so far this year has been satisfactory."

For further information, please contact

Cohort plc	Andrew Thomis, Chief Executive Simon Walther, Finance Director	[phone]
Investec	Keith Anderson, Daniel Adams	[phone]
MHP Communications	Reg Hoare, Vicky Watkins	[phone]

Cohort plc (www.cohortplc.com)  

Cohort is an independent technology group working primarily for defence (air, land and sea), wider government and industry clients, through three market-facing subsidiary companies:

·     MASS (www.mass.co.uk) - a specialist systems house with considerable experience in the defence market and a focus on Information Systems.  Based in Cambridgeshire, MASS was acquired by Cohort in August 2006;

·     SCS (www.scs-ltd.co.uk) - a defence consultancy, combining technical expertise with practical experience and domain knowledge. Owned by Cohort since flotation in March 2006;

·     SEA (www.sea.co.uk) - an advanced surveillance systems and software house with hardware development capability operating in the defence, space and transport market sectors. Acquired by Cohort in October 2007.

Cohort (AIM: CHRT) was admitted to London's Alternative Investment Market in March 2006. It has its headquarters in Berkshire and, through its operating companies, employs in total around 500 core staff there and at bases in Bristol, Cambridgeshire, Berkshire, Lincolnshire and Somerset.

 

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