Cohort profits edges up but revenue dips

Defence contractor Cohort reported a rise in full-year adjusted pre-tax profit on Tuesday even as revenue dipped as it said its overall results were in line with expectations.

In the year to 30 April, adjusted pre-tax profit increased 7% to £15.5m, but revenue edged down 1% to £111.8m. Adjusted operating profit came in at a record £15.6m compared to £14.5m the year before, driven by a strong performance from the Portugal-based EID business, a return to growth at MASS and the elimination of SCS's losses. These all helped to offset a decline in both revenue and profit at SEA.

The order intake declined to £76.6m in the year from £108.6m in 2017, a drop the company attributed to delays rather than losses or lack of opportunities.

Cohort said the Portuguese market has shown signs of returning to growth and is supported by a planned budget increase in the coming year of 9% in defence equipment spend.

The group's main domestic market, however, in the UK, remains tight, with spending on things such as support, research and development, and the commencement of new projects being constrained by the scale of commitments to existing projects.

Chairman Nick Prest said: "Cohort again improved its performance in the year, achieving record adjusted operating profit. A strong contribution from EID and a return to growth at MASS, with MCL steady, offset a weaker performance at SEA. Some restructuring at SEA in 2018/19 will improve its performance.

"The closing order book of £102.5m, together with recent contract wins, provides a reasonable underpinning for the current year.

"MASS, EID and MCL are all in discussions with customers about large orders, and a reasonable measure of success in relation to these prospects is important for our future performance."

At 1555 BST, the shares were down 4.1% to 350p.