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Cohort marches on

The defence contractor's closing order book reached a record £147m
December 16, 2014

Orders have come flooding in for Cohort's (CHRT) defence technology, with order intake up four-fifths to about £65m in the first half. To that can be added £38m from two recent acquisitions: electronic and surveillance technology provider Marlborough Communications and sonar systems manufacturer J+S. What's more, additional orders since the period end mean that 88 per cent of the defence contractor's consensus revenue forecast for the full year is now covered.

IC TIP: Buy at 236p

Adjusted operating profit rose by a third to £2.5m, thanks to solid demand for high-margin electronic warfare activities. Submarine communication products also proved popular in the SEA business Cohort bought in 2007. Success here and the disposal of the struggling space business helped boost margins from 7 to 8.9 per cent.

Chief executive Andrew Thomis told us that demand shows no sign of slowing down - buoyed in particular by cutting-edge cyber security business MASS, which Cohort bought in 2006. He also plans to continue making the most of Cohort's cash pile by making further earnings-enhancing acquisitions - though that won't rule out further growth in the dividend payment.

Broker Investec expects full-year adjusted pre-tax profit of £9.8m, giving EPS of 17.5p (from £8.3m and 18.7p).

COHORT (CHRT)
ORD PRICE:236pMARKET VALUE:£ 97m
TOUCH:232-240p12-MONTH HIGH:250pLOW: 162p
DIVIDEND YIELD:1.9%PE RATIO:17
NET ASSET VALUE:123p*NET CASH:£6.7m

Half-year to 31 OctTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201333.21.94.01.4
201437.61.32.81.6
% change+13-30-28+14

Ex-div: 5 Feb

Payment: 4 Mar

*Includes intangible assets of £56.7m, or 138p a share