REG - Cohort PLC - Full Year Trading Update

CohortAnnouncement

29/05/2025 07:00

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RNS Number : 4960K  Cohort PLC  29 May 2025

 One Waterside Drive

 Arlington Business Park

 Reading

 Berks

 RG7 4SW

        29 May 2025

 

COHORT PLC

("Cohort" or "the Group")

 

Full Year Trading Update

 

Strong growth, in line with expectations

Record closing order book

 

Cohort, the independent technology Group, today provides a trading update for
its financial year ended 30 April 2025.

 

Summary

 * Trading performance for the year ended 30 April 2025 showed strong growth in
revenue and profit compared to the year ended 30 April 2024, in line with
market expectations.

 * Positive closing net funds exceeded £5m, significantly ahead of expectations.
The Group has maintained a strong balance sheet and liquidity following the
£75m acquisition of EM Solutions and associated £41m fund raising.

 * Strong order intake of c.£285m (excluding the c.£80m order book acquired
with EM Solutions) once again exceeded revenue. The comparable 2024 figure of
£387m included an exceptionally large Royal Navy order of £135m.  Excluding
this large naval order, the increase was 12%.

 * The closing order book of c.£615m represented a new record for the Group (30
April 2024: £518.7m).

 * The order book underpins c.£230m of current market revenue expectations for
the new financial year (30 April 2024: £180m) or c.80% cover of current
market expectations.

 * The Group agreed the sale of its small Transport division (reported within
Sensors and Effectors) immediately after the year end for a consideration of
just over £8m.  The disposal is expected to complete 30 June 2025, and to
have no material impact on earnings estimates for 2025/26.

 

FY25 year-end update

 

Cohort achieved strong growth in revenue and profit in its 2024/25 financial
year, in line with market expectations. The result was driven by excellent
organic growth in the Communications and Intelligence division, supplemented
by an initial three-month contribution from EM Solutions, with the performance
of the Sensors and Effectors division broadly flat compared with last year.
The Group net margin was 10.2% (2024: 10.4%).

 

Communications and Intelligence saw excellent growth in revenue and trading
profit with a net margin of around 17% compared with 15.5% last year. Sensors
and Effectors delivered a broadly flat trading profit performance despite
higher revenue. The net margin of this division was just under 9% compared
with over 10% last year.  The fall in net margin was due to weaker margin mix
at SEA and delays and one-off project costs at Chess.

 

Cohort maintained a strong balance sheet and liquidity, ending the year with
net funds of over £5m, a result of good working capital management in both
divisions. This followed completion of the AUD$144.0 million (£75m)
acquisition of EM Solutions - Cohort's largest to date - which was funded by a
combination of a £41 million placing, own cash and debt facility.

 

Order intake was c.12% higher than last year, excluding the impact of the
large Royal Navy contract signed in March 2024. Total order intake (excluding
the c.£80m order book acquired with EM Solutions) was around 1.1x annual
revenue (2024: 1.9x).

 

Following several significant contract awards during the year and the addition
of EM Solutions, the closing order book exceeded six hundred million pounds,
with on-order revenue extending out to the mid-2030's.

 

The disposal of the Group's small non-core Transport division, part of SEA, is
a positive step in further focussing our business on defence and security.
Following this, the Group's on-going non-defence revenue is expected to be
about 3% of the total.

 

Outlook for FY26

 

Cohort continues to see good demand for our products and services from both
domestic and export customers. The drivers for investment in defence remain
strong, with the ongoing conflict in Eastern Europe and continuing tensions in
the Indo-Pacific region leading to increased global defence spending.  We
still await the UK's Strategic Defence Review, but at present we expect this
to maintain a focus on technologies and capabilities aligned with what the
Group provides.

 

The recent acquisition of EM Solutions (completed on 31 January 2025) is
highly complementary and is in line with our stated strategy to accelerate
growth by making targeted acquisitions in the UK and overseas. Australia is an
increasingly important strategic region, reflecting the increased security
challenges in the Indo Pacific, and the creation of the AUKUS alliance. The
integration of EM Solutions is progressing to plan, and we expect a strong
contribution from the business in 2025/26.

 

We have an encouraging pipeline of order opportunities for the current year,
providing a positive outlook for organic growth in the years ahead and
supporting our mid-term aim to improve net margins to a low to mid-teen %.
Overall, our expectation for the coming financial year remains unchanged.

 

 

Notice of FY25 results

 

It is the Group's intention to issue its preliminary announcement for the year
ended 30 April 2025 on 16 July 2025.

 

Andrew Thomis, Chief Executive of Cohort, said:

 

"Cohort achieved strong growth in revenue and profits in 2024/25, in line with
market expectations. Following another year of strong order intake and the
recent acquisition of EM Solutions, we have a record closing order book and
encouraging prospects for further orders.

 

"We are excited about the integration of EM Solutions and the additional
opportunities for growth it represents. It was a significant step for Cohort,
broadening our strong naval systems service offering, bringing in new
customers and enhancing the global footprint of the combined business.

 

"Our strong balance sheet and liquidity provides a robust platform from which
to continue to invest in the business while considering selective
acquisitions. We expect to continue our strong organic growth in 2025/26 and
beyond."

 

Market expectations

 

The consensus market expectations for the year ended 30 April 2025 were
£27.6m of trading profit on £245m of revenue, delivering adjusted earnings
per share of 46.1 pence.

 

 

 

ENDS

 

 

 

For further information please contact:

 

 Cohort plc                                                            0118 909 0390
 Andrew Thomis, Chief Executive
 Simon Walther, Finance Director
 Kellie Young, Group Head of Marketing & Corporate Communications

 Investec Bank Plc (NOMAD and Broker)                                  020 7597 5970
 Carlton Nelson, Christopher Baird

 MHP                                                                   07817 458804
 Reg Hoare, Ollie Hoare, Hugo Harris                                   cohort@mhpgroup.com

 

 

NOTES TO EDITORS

 

Cohort plc (www.cohortplc.com
(https://protect.checkpoint.com/v2/___http:/www.cohortplc.com/___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzo2ZjA0ZjQwZDI1ZmZhMzU0YzFiZWIzMTNiNjJiNDEzYzo2OjY4NGE6OGViODU5ZjhhNzM4YWY4YjE3M2FlNTQ4NDdjYWYxMGRmZDBhNDI2ZTdjY2RkYjhjMWNjYWYzOTcxNzMzMTZiODpwOlQ6Tg)
) is the parent company of seven innovative, agile and responsive businesses
based in the UK, Australia, 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 1,600 core staff there and at its other operating company sites across
the UK, Australia, 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
(https://protect.checkpoint.com/v2/___http:/www.eid.pt___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzo2ZjA0ZjQwZDI1ZmZhMzU0YzFiZWIzMTNiNjJiNDEzYzo2OmM1NGQ6YjkwYWEzOTU4MTg5YWI4ZDgxMDhlMGM3MWM4NDQ3OWMzZWRlYmZmYjQzZmZlNzJiYTFjZGRhY2Y3NGYzNmE0ZTpwOlQ6Tg)

·      EM Solutions designs, assembles, tests, and supports satellite
communications on-the-move terminals for defence and government customers. It
also provides high-end broadband radio transceivers and other RF Subsystems
such as low noise receivers and solid-state high-power transmitters for
defence and commercial customers. Acquired by Cohort in January
2025. www.emsolutions.com.au ()

·      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
(https://protect.checkpoint.com/v2/___http:/www.marlboroughcomms.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzphYjZmYzUzYmU4MDRhZTQ4NDQwYjI0OGI2MmI1NWZjNTo2OmQ1Yjc6YzFmMzZmMzE5YWY0YzczYzlhNTE2ZTFkZWI1NzVkNTFiYzkwZTA5Y2MwMzgyZjMwOGJhNjVhYjYyNDhkNDVkYzpwOlQ6Tg)

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
(https://protect.checkpoint.com/v2/___http:/www.chess-dynamics.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzo2ZjA0ZjQwZDI1ZmZhMzU0YzFiZWIzMTNiNjJiNDEzYzo2OmVkOWU6YjBmN2ZiOTQ5NTVmNjU2ZDU4ZGRmYjFjMmFjZDIzYmU4NDNkNDI2Y2YwNjc4ZTcyMGVkN2ZmM2NhMzI2YTM3MTpwOlQ6Tg)

·      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
(https://protect.checkpoint.com/v2/___http:/www.elac-sonar.de___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzo2ZjA0ZjQwZDI1ZmZhMzU0YzFiZWIzMTNiNjJiNDEzYzo2OjVjYjk6ZmE4ZGMyMmRhYjYyZDg2MzQ3ZTMzNzM2YTQ1MjQ2MmVhYzUxMmJkNDlmZmVhZWVmOWExM2VmOGExZDA2YTViNDpwOlQ6Tg)

·      SEA delivers and supports technology-based products primarily for
naval defence customers alongside specialist research and training
services. Acquired by Cohort in October 2007.  www.sea.co.uk

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