Cohort plc - Half year results for the six months ended 31 October 2018

Published 12th December 2018

Financial and operational highlights

  • Order intake of £45.6m (2017: £39.2m).
  • Closing order book of £108.8m (30 April 2018: £102.5m).
  • Revenue of £39.5m (2017: £44.0m).
  • Adjusted* operating profit of £1.0m (2017: £3.3m).
  • Adjusted* earnings per share of 1.99 pence (2017: 5.80 pence). • Net funds of £4.7m (31 October 2017: £5.7m; 30 April 2018: £11.3m).
  • Interim dividend increased by 12% to 2.85 pence per share (2017: 2.55 pence per share).
  • Seasonally quieter first half in line with last five financial years mainly due to order timing.
  • As announced today, the Group completed the acquisition of 81.84% of Chess Technologies Ltd (“Chess”) for total cash consideration of up to £41.9m.

Looking forward

  • Historic second half weighting expected to be even greater this year.
  • Key orders totalling over £100m already secured or down selected adding to the £45m of orders already won in H1.
  • The 30 November order book of £135.4m underpins over £50m of revenue deliverable in the second half, which including revenue delivered to date, is 81% (2017: 83%) of consensus forecast revenue for the full year.
  • Prospects for further orders in the second half to further underpin this year and next year are good.
  • Performance for 2018/19, before the impact of Chess, is expected to be similar to last year.
  • Five months’ contribution from 81.84% of Chess in the second half expected to be earnings enhancing.

Nick Prest, Chairman, commented:

“Cohort’s result in the first half was lower than in the first half of the previous year, due to a combination of delivery slippage, some at customer request, and order delays.

“We previously referred to a number of key order opportunities which could have a major impact on our prospects for 2018/19 and beyond. These orders alone will total over £100m, on top of the £45m of orders won in the first half, and we expect 2018/19 to be a record year for order intake for Cohort.

“At 30 November our order book was £135.4m (30 April 2018: £102.5m), providing strong underpinning for the second half. We therefore expect, as seen in the last few years, a much stronger performance in the second half.

“Overall, allowing for the fact that we have proportionately more to do in the second half, the Board’s considered view is that Cohort’s overall performance in 2018/19, before taking account of the acquisition of Chess, will be similar to 2017/18 with the elements in place to deliver further progress in 2019/20.

“The acquisition of Chess represents a significant expansion, adding a profitable and growing fifth standalone business to Cohort’s portfolio. It furthers our strategy of expanding in defence products and export markets. We expect it to be earnings enhancing in the current year.”

* Adjusted figures exclude the effects of marking forward exchange contracts to market value, other exchange gains and losses, amortisation of other intangible assets and exceptional items.

* Where appropriate, the comparative figures have been restated in accordance with IFRS 15 (see note 8).