Acquisitions drive growth for Cohort in first half

The AIM-traded firm said its adjusted operating profit was £4.0m in the six months ended 31 October, rising from £1.0m, while on a like-for-like basis, adjusted operating profit was ahead 120%.

Adjusted earnings per share were up to 6.94p from 1.99p.

Cohort said its order intake for the period was £77.2m, compared to £45.6m a year ago, while its closing order book stood at £206.7m, compared to £190.9m at the end of April.

Net debt was £6.8m, swinging from net funds of £4.7m a year earlier, and widening from net debt of £6.4m at the start of the period.

The board declared an interim dividend of 3.2p per share, up 12% from the 2.85p distribution announced 12 months prior.

On the operational front, Cohort reported an initial first half contribution from Chess and an improvement in the remainder of the group, particularly at MASS.

At the same time, it announced an agreement to acquire Wärtsilä ELAC Nautik for a headline price of €11.25m, which was expected to complete before 30 June.

Looking ahead, Cohort said a second-half weighting was expected again, and explained that its half-year order book of £206.7m underpinned more than £60m of revenue deliverable in the second half, which, added to revenue delivered to date, was 83% of consensus forecast revenue for the full year, up from 71%.

It said its prospects for more orders in the second half, to further underpin the current year and the next, were “good”.

Full-year performance was expected to be in line with market expectations.

The board said the acquisition of ELAC represented a “significant strategic step”, furthering its expansion in defence products and export markets, particularly the naval sector.

“Cohort delivered an improved result compared to the same period last year, due to a combination of an initial first half contribution from Chess and an improvement in the underlying group, particularly at MASS,” said chairman Nick Prest.

“The order book of nearly £207m underpins a significant proportion of the second half revenue, and, as in recent years, we expect a stronger second half.

“The board expects Cohort's performance in 2019/20 will be in line with market expectations.”

Prest added that the acquisition of ELAC would represent a “significant expansion”, adding a profitable and growing sixth stand-alone business to Cohort's portfolio.

“It furthers our strategy of expanding in defence products and export markets.”

At 1205 GMT, shares in Cohort were up 3.09% at 617.5p.