Ticker: CHRT Exchange: AIM

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.

Record results in FY23 and positive outlook

For the year to 30 April 2023, Cohort reported record revenue of £182.7m +33%YoY, matched by record (adj.) EBIT of £19.1m, +23%YoY. The closing order book of £329.1m (FY22: £291.0m) was also at a high, boosted by order intake of £220.9m; by June this had reached £360m. EPS rose 17%YoY to 36.48p/share, with the proposed total dividend of 13.4p/share +10%YoY.

Notwithstanding a strategically firm defence outlook – based on the conflict in Ukraine, tensions in the South China Sea, and cohesion amongst NATO allies - coincident with results, the MOD published on 18th July the Defence Command Paper Refresh (DCP23). In addition to committing £2.5bn to defence stockpiles, the paper heralded a “New Alliance” between defence and industry.

Overall, FY23 revenue was 10.7% above our outlook (£165.0m) and (adj.) EBITDA 5.5% above: we have now  raised our FY24 revenue outlook by 7% to £188.1m and EBITDA (adj.) by 5% to £25.0m. The key driver for medium-term growth remains the healthy, and growing, order book: our Fair Value remains at 650p/share.



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