Sales may have dipped, largely because of reduced spending by the UK Ministry of Defence and delayed space contracts, but Cohort (CHRT) - a defence equipment and software specialist - still managed to boost adjusted operating profits by 9 per cent, to £3.3m.
Group performance was helped by greater cost efficiencies and a shift to higher-margin revenue at the SEA surveillance division. SEA's adjusted operating profits were £1.4m, up from £0.8m.
A sturdy performance at MASS, Cohort’s electronic warfare unit, also shored up results. In line with expectations, MASS posted an adjusted operating profit of £2.5m. A one-off £1m profit item, which relates to an earlier acquisition made by MASS, explains the enormous jump in reported pre-tax profits.
"It's a tough market, but we're pleased with the progress made at SEA and MASS," says Andrew Thomis, chief executive, although he concedes there are some uncertainties ahead at SCS, a technical advisory specialist that counts the MoD as a key client. SCS's forward order book is £4.8m, down from £8.4m.
At a group level, the picture looks brighter. Order intake for the first half was £29.9m, of which £27.3m is expected to be converted into sales in the second half. "That gives 70 per cent cover of expected full-year revenues," says Mr Thomis.
Investec forecasts a full-year adjusted EPS of 14.3p, down from 15.5p. The broker, however, expects recovery to 15.5p in the following year.
COHORT (CHRT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 124p | MARKET VALUE: | £50.5m | |
| TOUCH: | 121-126p | 12-MONTH HIGH: | 135p | LOW: 89p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 135p* | NET CASH: | £12.1m | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 37.4 | 1.80 | 3.46 | 1.00 |
| 2012 | 33.8 | 4.32 | 9.35 | 1.20 |
| % change | -9 | +139 | +170 | +20 |
Ex-div: 6 Feb Payment: 6 Mar *Includes intangible assets of £31.8m, or 78p a share | ||||
