Major £135m contract award

Cohort announces that its subsidiary SEA (Systems Engineering and Assessment Ltd.) has been awarded a major contract by the UK’s Ministry of Defence to provide Electronic Warfare Counter Measures (Increment 1a) (EWCM 1a) to the Royal Navy with a total value of at least £135m. This includes provision and support of SEA’s Trainable Decoy Launcher System, Ancilia.

At the FY 24 interim results Cohort had commented on an overall “increased tempo” of order intake. The Group reported a closing order book of £354m: we note that this latest contract takes the closing order book above the £0.5bn mark at £513.6m.

We have raised our FY25 revenue outlook by 2.5% (£5.0m). Thereafter we estimate a contribution from the SEA EWCM contract of c.£15.0m annually. Our FY25 E (adj.) EBITDA estimate is raised by £2.0m, +10%, with an estimated subsequent incremental annual c.£5.0m contribution. Our FY25 EPS outlook is raised from 36.7p to 41.8p. Accordingly, and in the light of additional recent contract wins (e.g. the 19 March Chess Australian Navy contract) our Fair Value is raised to 725p.