Cohort earnings ahead in first half

Cohort announced its final results for the six months to 31 October on Monday, including adjusted operating profit up 11% at £3.9m, off revenue up to £50.0m from £49.7m at the same time last year.

The AIM-traded company reported an order intake of £63.6m, up from £55.7m, including an acquired order book of £23.1m.

Its closing order book stood strong at £129.6m , rising from £116.0m a year earlier.

Net funds of £9.9m were down on the year end, as previously expected - they were £11.4m at the same time last year and £19.8m at year-end on 30 April.

The interim dividend was increased by 16% to 2.20p.

Adjusted earnings per share were 16% lower at 5.99p, which the board said reflected a significant proportion of the earnings in the period being derived from the partially owned EID and MCL.

Looking forward, Cohort said a stronger second half performance was in prospect, maintaining its expectations for the year, with the historic second half weighting to be repeated.

It said £49.5m of the 31 October order book was deliverable in the second half and underpinned nearly 80% of the consensus forecast revenue for the full year.

Prospects for further order intake in the second half across the group was said to be “encouraging”.

The firm would also benefit of a full six months' contribution from EID and the elimination of SCS's losses.

And agreement in principle to acquire a further 23% of EID from the Portuguese Government was being made, and the remainder of MCL was expected to be acquired on or before 31 December.

“The group's first half operating profit increase was driven by the initial contribution from EID and a much better first half at MCL, balanced by adverse market conditions experienced in some other areas of the business,” said Cohort’s chairman Nick Prest CBE.

“We are confident of a strong second half performance across the whole group reflecting our normal seasonality, order book visibility, the benefit of a full second half contribution from EID and the elimination of SCS losses.

“Overall, Cohort's order book and pipeline, market positions, capabilities and strong funding position provide confidence that we will make further progress in 2016/17, and we maintain our expectations for the full year.”