The Cohort Group comprises six military, electronics and intelligence development operations spread across the UK, Germany, and Portugal. The six are: Chess offering electro-optical tracking and surveillance systems for naval and land defence and security customers; EID designs and makes advanced communications systems for naval and land defence customers; ELAC SONAR supplies advanced sonar systems and underwater communications to global customers in the naval marketplace; MASS provides advanced digital services serving the defence and security markets MCL designs, sources and supports advanced electronic and surveillance technology for the UK MOD and other government agencies; SEA delivers and supports technology-based products for the defence and transport markets alongside specialist research and training services.

26 Mar 2024

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.

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