Cohort ends year in line, warns on 2022 profitability

The AIM-traded firm said net funds for the 12 months ended 30 April were stronger than expected at £2m, swinging from net debt of £4.7m a year earlier, and net debt of £6.1m at the half-year.

It reported record order intake of around £210m for the year, up from £124.4m year-on-year, with its closing order book rising to £240m from £183.3m at the end of the 2020 financial year.

The board said the closing order book underpinned £100m, or 63%, of market revenue expectations for the year to 30 April 2022, compared to £83m or 60% at the end of the prior year.

Cohort completed the acquisition of ELAC during the year, which the board said represented a “significant” expansion, adding a “profitable and growing” sixth stand-alone business to the group.

While its expectations for revenue growth for the current financial year were unchanged, the board warned that given the expected mix of revenues and resulting margin impact, profit growth was expected to slow.

It explained that delays in the placing of certain orders with EID, representing around one third of that division’s revenue, was likely to negatively affect its trading performance.

While the overall performance of Cohort’s other businesses meant group revenue expectations were unchanged, leading to “good” revenue growth, the mix of revenues was expected to see a reduction in its overall margin, and accordingly a lower rate of profit growth.

“Cohort had a strong year, performing in line with our expectations despite the challenges posed by the pandemic,” said chief executive officer Andrew Thomis.

“Our financial position ended the year stronger than expected with positive net funds.”

Thomis said that, together with its banking facilities, that provided the firm with flexibility to invest in the business and consider acquisitions.

“Notwithstanding the disappointment of delays to certain EID orders, we continued to strengthen our order book with further contract wins, and we see good prospects for further significant new orders.”

Cohort said it would issue its final results for the year ended 30 April in late July.

At 1133 BST, shares in Cohort Group were down 5.6% at 632.48p.