Full Year Trading Update

Cohort PLC

23 May 2024

 

One Waterside Drive Arlington Business Park Reading Berks RG7 4SW        23 May 2024

COHORT PLC

("Cohort" or "the Group")

Full Year Trading Update

Performance slightly ahead of expectations

Record closing order book

Cohort, the independent technology Group, today provides an unaudited trading update for its financial year ended 30 April 2024.

Summary

·      Trading performance for the year ended 30 April 2024 is slightly ahead of expectations, with growth in revenue and profits compared to the year ended 30 April 2023.

·      Strong net funds of c.£23m, ahead of expectations (30 April 2023: £15.6m; 31 October 2023: £13.3m).

·      Very strong order intake of c.£387m (2023: £218m)

·      Record closing order book of c.£518m (30 April 2023: £329.1m) including the £135m Royal Navy countermeasures contract awarded to SEA in March 2024

·      Order book underpins c.£180m (90%) of current market revenue expectations for the year ended 30 April 2025 (2024: £145m, 84%).

FY24 year-end update

Following a strong second half profit performance, Cohort has delivered results slightly ahead of expectations for the year. The Group has seen robust growth within the Sensors and Effectors division, offset by somewhat weaker trading seen within the Communications and Intelligence division.

Sensors and Effectors saw robust growth across all its constituent businesses but particularly within Chess and SEA. Chess continued its growth trajectory following its turnaround performance last year, with SEA continuing to secure and deliver on large naval orders.

In Communications and Intelligence, as expected, UK MOD product orders decreased from the high levels seen in 2022/23, whilst we continued to see contract delays within Portugal.

The closing net funds position was ahead of expectations and arose from favourable timing of working capital flows and delayed capital expenditure due to adverse winter weather, on our new facility in Germany, which will now take place in the 2024/25 financial year.

The order intake is c.1.9x the annual revenue (2023: 1.2x). Following significant contract awards during the year, the order book exceeded half a billion pounds for the first time, with on-order revenue now extending to 2037. The order intake performance was c.80% higher than last year.

The year end order book underpins c.£180m (90%) of the current consensus market revenue expectations for 2024/25, an improvement on the year just finished.

Outlook for FY25

Cohort continues to see good demand for our products and services from both our domestic customers, especially the UK, and from export customers. The drivers for increased investment in defence have amplified during the year, with the ongoing conflicts in Ukraine and the Middle East, coupled with tensions in the Indo-Pacific region leading to increased global defence spending.

The Royal Navy's recent order for the Ancilia Trainable Decoy Launcher System, was a significant milestone for the Group. It represents a strong vote of confidence in the product; a fully UK designed and built solution for which we see encouraging export prospects. As stated in our announcement of 26 March 2024, this together with other recent order wins, is expected to materially enhance the Group's earnings.

We have an encouraging pipeline of order opportunities for the current year, providing a positive outlook for organic growth in the years ahead. Overall, our expectations for the coming financial year remain unchanged.

Notice of FY24 results

It is the Group's intention to issue its preliminary announcement for the year ended 30 April 2024 in late July 2024.

Andrew Thomis, Chief Executive of Cohort, said:

"Cohort's performance was slightly ahead of our previous expectations for the year with growth in revenue and profits. Following strong order intake, we have a record closing order book with encouraging prospects for further orders. Our strong closing net funds position provides a robust platform from which to invest in the business and, potentially, acquisitions. We expect to continue our organic growth in 2024/25 and beyond."

ENDS

For further information please contact:

Cohort plc	0118 909 0390
Andrew Thomis, Chief Executive
Simon Walther, Finance Director
Raquel McGrath, Company Secretary Emily McBride, Group Head of Marketing & Corporate Communications
Investec Bank Plc (NOMAD and Broker)	020 7597 5970
Carlton Nelson, Christopher Baird
MHP	07817 458 804
Reg Hoare, Ollie Hoare, Hugo Harris	[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.

Cohort (AIM: CHRT) was admitted to London's Alternative Investment Market in March 2006. It has headquarters in Reading, Berkshire and employs in total over 1,250 core staff there and at its other operating company sites across the UK, Germany, and Portugal.

The group is split into two segments - Communications and Intelligence, and Sensors and Effectors:

Communications and Intelligence

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

·      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

Sensors and Effectors

·      Chess Dynamics offers surveillance, tracking and fire-control systems to the defence and security markets. Chess has been part of the Group since December 2018. www.chess-dynamics.com

·      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 

·      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

 

END