FY24: record results and maintained momentum

Cohort reported strong FY24 results, with revenue +11%YoY at £202.5m, which was 8% above our outlook, and (adj.) operating profit of £21.1m +11%YoY (3% above EDE). The closing order book was £518.7m +58%YoY with order intake of £392.1m, +78%YoY, and estimated 95% coverage of our FY25 revenue outlook. The year closed with net cash of £23.1m.

National security and spending on defence became an issue of top priority through the course of pre-election campaigning, with the Labour Government indicating that it would increase spending to 2.5% of GDP compared an estimated 2.30% in 2023/24. The Group reports good demand from both domestic customers and for exports, noting increased attention to defence spending spurred by conflict in Ukraine and ongoing tension in the Indo-Pacific region.

Our read-across to the market cap-weighted average of peers leads us to raise our Fair Value / share to 910p from 725p.