Full Year Trading Update

Record closing order book

Cohort, the independent technology Group, today provides an unaudited trading update for its financial year ended 30 April 2024.

Summary

• Trading performance for the year ended 30 April 2024 is slightly ahead of expectations, with growth in revenue and profits compared to the year ended 30 April 2023.
• Strong net funds of c.£23m, ahead of expectations (30 April 2023: £15.6m; 31 October 2023: £13.3m).
• Very strong order intake of c.£387m (2023: £218m)
• Record closing order book of c.£518m (30 April 2023: £329.1m) including the £135m Royal Navy countermeasures contract awarded to SEA in March 2024
• Order book underpins c.£180m (90%) of current market revenue expectations for the year ended 30 April 2025 (2024: £145m, 84%).

FY24 year-end update

Following a strong second half profit performance, Cohort has delivered results slightly ahead of expectations for the year. The Group has seen robust growth within the Sensors and Effectors division, offset by somewhat weaker trading seen within the Communications and Intelligence division.

Sensors and Effectors saw robust growth across all its constituent businesses but particularly within Chess and SEA. Chess continued its growth trajectory following its turnaround performance last year, with SEA continuing to secure and deliver on large naval orders.

In Communications and Intelligence, as expected, UK MOD product orders decreased from the high levels seen in 2022/23, whilst we continued to see contract delays within Portugal.

The closing net funds position was ahead of expectations and arose from favourable timing of working capital flows and delayed capital expenditure due to adverse winter weather, on our new facility in Germany, which will now take place in the 2024/25 financial year.

The order intake is c.1.9x the annual revenue (2023: 1.2x). Following significant contract awards during the year, the order book exceeded half a billion pounds for the first time, with on-order revenue now extending to 2037. The order intake performance was c.80% higher than last year.

The year end order book underpins c.£180m (90%) of the current consensus market revenue expectations for 2024/25, an improvement on the year just finished.

Outlook for FY25

Cohort continues to see good demand for our products and services from both our domestic customers, especially the UK, and from export customers. The drivers for increased investment in defence have amplified during the year, with the ongoing conflicts in Ukraine and the Middle East, coupled with tensions in the Indo-Pacific region leading to increased global defence spending.

The Royal Navy's recent order for the Ancilia Trainable Decoy Launcher System, was a significant milestone for the Group. It represents a strong vote of confidence in the product; a fully UK designed and built solution for which we see encouraging export prospects. As stated in our announcement of 26 March 2024, this together with other recent order wins, is expected to materially enhance the Group's earnings.

We have an encouraging pipeline of order opportunities for the current year, providing a positive outlook for organic growth in the years ahead. Overall, our expectations for the coming financial year remain unchanged.

Notice of FY24 results

It is the Group's intention to issue its preliminary announcement for the year ended 30 April 2024 in late July 2024.

Andrew Thomis, Chief Executive of Cohort, said:

"Cohort's performance was slightly ahead of our previous expectations for the year with growth in revenue and profits. Following strong order intake, we have a record closing order book with encouraging prospects for further orders. Our strong closing net funds position provides a robust platform from which to invest in the business and, potentially, acquisitions. We expect to continue our organic growth in 2024/25 and beyond."

Communications and Intelligence

Sensors and Effectors