Cohort (CHRT) Investor Update summary

Financial performance and outlook

• Revenue reached a record £128.8m for the first half, with profit in line with expectations and a robust order intake of £122.3m, maintaining an order book over £600m.

• Adjusted operating profit declined slightly to just under £10m, and adjusted EPS fell to 16.16p; effective tax rate was 15.5%.

• Operating cash outflow was £27.9m due to working capital build and capex, resulting in net debt of £32.5m at period end; net funds expected to be £10–15m at year-end.

• Interim dividend increased by 10% to 5.8p, reflecting board confidence in future prospects.

• Full-year expectations remain unchanged, with 96% of revenue covered by orders or deliveries and a targeted net margin of around 12%.

Divisional performance and strategic initiatives

• Communications and intelligence division revenue rose 13% to £62.5m, with EM Solutions making the largest profit contribution and MASS performing strongly.

• Sensors and effectors division saw margin pressure due to mix and lower SEA revenue, but Chess returned to profitability and ELAC completed its new facility.

• EID is expected to return to profitability, with significant orders anticipated from the Portuguese Navy.

• Strategic investments include new facilities in Germany and Canada, and a memorandum of understanding with Hanwha Ocean for the Thai Navy program.

Market environment and growth drivers

• Heightened global security risks and increased defense spending in Europe and Asia-Pacific are driving demand for defense technology.

• Demand catalysts include the Ukraine conflict, China tensions, and adoption of AI-enabled and autonomous systems.

• Opportunities identified in underwater infrastructure protection, secure communications, electronic warfare, and counter-drone systems.

• International expansion and acquisitions, such as EM Solutions, are broadening market reach and product offerings.