Full Year Trading Update

RNS Number : 8470M

Cohort PLC

26 May 2022

 

One Waterside Drive Arlington Business Park Reading Berks RG7 4SW 26 May 2022

COHORT PLC

("Cohort" or "the Group")

Full Year Trading Update

Cohort plc, the independent technology Group, today announces an unaudited trading update for its financial year ended 30 April 2022. 

Summary:

· Trading performance for the year ended 30 April 2022 is in line with our revised expectations at the time of the interim statement, other than on slightly weaker than expected revenue.

· Net funds at c.£11m (30 April 2021: net funds of £2.5m; 31 October 2021: net funds of £6.1m).

· Strong order intake of around £183m (2021: £180.3m).

· Record closing order book of c.£287m (30 April 2021: £242.4m).

· The closing order book underpins nearly £113m (69%) of the market revenue expectations for the year ended 30 April 2023 (2022: £100m, 64%).

FY22 year-end update 

Cohort's performance was in line with our revised expectations for the year, as set out in our interim statement in December 2021.  Compared with 2021, the 2022 performance saw stronger performances from MCL, SEA, ELAC and MASS, offset by weaker performances from Chess and EID.

All of the Group businesses are returning to normal working after the pandemic but continue to experience some impact from global supply chain issues.  The lifting of international travel restrictions has enabled access to customer premises for acceptance tests and contract negotiations.  The Group has been able to resume close customer contact through industry events, with a significant presence at the DSEI exhibition in London in September 2021, and more recently attendance at events in the Far East and Australia.

Order intake remains strong. The Group benefited from the ELAC order for over €49m for the Italian Navy (announced July 2021), continued orders from the UK MOD for MCL's hearing protection and communication ancillaries (announced April 2022) , significant export orders for SEA's Torpedo Launcher System (announced February 2022), and a strong first half contribution from MASS.  EID continues to support the Portuguese Army, winning a significant order for its new Soldier System product (announced November 2021), although its overall order intake performance was weaker than our expectations.

As a result of the strong order intake the Group's closing order book grew to c£287m (30 April 2021: £242.4m), of which certain orders extend out to the 2030s.  This positive performance has given us enhanced visibility of future revenue across our businesses,  particularly so at Chess, ELAC, MCL and SEA for the coming year.  Overall, we entered the new financial year with nearly £113m (69%) of market revenue expectations for the year ended 30 April 2023 on order.

In the longer-term, as a result of the conflict in Ukraine, we expect an increased focus on defence related spending from governments in the region. 

Net funds continue to be strong and were better than expected at the year end.

Outlook for FY23

Following actions we took at Chess to improve performance, we are starting to see progress.  We saw delays at MASS in the last financial year in delivering training to international customers but expect these to be resolved in the second half of the current financial year.  Momentum in SEA's naval division remains strong and several important opportunities at EID are expected in 2022/23.

The Group continues to see challenges to its supply chain from higher prices and longer lead times.  We continue to monitor and manage this closely, and we have taken action where appropriate, including increasing our holding of certain stock items.  Recruitment, particularly in some areas of engineering and IT, remains a challenge, though we have been able to increase our headcount through the year by 4% to deliver the larger order book over the coming years.

Overall, despite the residual challenges of the pandemic and the uncertain economic conditions, we expect to resume organic growth in 2022/23 and beyond and are not changing our expectations for the current financial year.

Notice of FY22 results

It is the Group's current intention to issue its final results for the year ended 30 April 2022 in late July 2022.

Andrew Thomis, Chief Executive of Cohort, said:

"Cohort's performance was in line with our revised expectations for the year.  Strong order intake, record closing order book and strong closing net funds provided a good start to the new financial year, and we expect to resume organic growth in 2022/23 and beyond."

ENDS

For further information please contact:

Cohort plc	0118 909 0390
Andy Thomis, Chief Executive
Simon Walther, Finance Director Raquel McGrath, Company Secretary
Investec Bank Plc (NOMAD and Broker)	020 7597 5970
Daniel Adams, Christopher Baird
MHP Communications	020 3128 8570
Reg Hoare, Pete Lambie	[e-mail]

NOTES TO EDITORS 

Cohort plc ( www.cohortplc.com ) is the parent company of six innovative, agile and responsive businesses based in the UK, Germany and Portugal, providing a wide range of services and products for domestic and export customers in defence and related markets.

Chess offers surveillance, tracking and fire-control systems to the defence and security markets. A majority stake was acquired by Cohort plc in December 2018. www.chess-dynamics.com

EID designs and manufactures advanced communications systems for naval and military customers. Cohort acquired a majority stake in June 2016.  www.eid.pt

ELAC SONAR supplies advanced sonar systems and underwater communications to global customers in the naval marketplace.  Acquired by Cohort in December 2020.  www.elac-sonar.de  

MASS is a specialist data technology company serving the defence and security markets, focused on electronic warfare, digital services and training support.  Acquired by Cohort in August 2006.  www.mass.co.uk

MCL designs, sources and supports advanced electronic and surveillance technology for UK end users including the MOD and other government agencies. MCL has been part of the Group since July 2014.  www.marlboroughcomms.com

SEA delivers and supports technology-based products for the defence and transport markets alongside specialist research and training services. Acquired by Cohort in October 2007.  www.sea.co.uk

Cohort (AIM: CHRT) was admitted to London's Alternative Investment Market in March 2006. It has headquarters in Reading, Berkshire and employs in total around 1,000 core staff there and at its main operating company sites across the UK, Germany and Portugal.

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