A well signposted drop in half-year profits at defence contractor Cohort (CHRT) still saw the shares fall nearly 11 per cent on the day the figures appeared. Total group revenue was broadly flat, but adjusted operating profit at the MASS business - which provides specialist information systems - more than halved to £1.2m. Moreover, a shift towards lower-margin education work meant that the division's operating margin slipped from 20.3 per cent to 10.6 per cent.
Turnover at surveillance systems specialist SEA edged ahead from £13.9m to £14m - but operating profit there fell 28 per cent to £0.98m after last year's level of contract completions failed to be repeated. So, while the order intake here rose from £20m to £22m, this mostly reflected contracts in the early stages of development. The defence technical advisory business, SCS, delivered an improved performance following last year's restructuring - turnover here grew just 3 per cent to £7.54m, but profit jumped from £110,000 to £419,000. Overall, Cohort expects a much stronger second half - the total order book rose £2.5m in the six months to £98.2m and some £25.5m is expected to be delivered in the second half.
Broker Investec Securities has maintained its estimates for full-year adjusted pre-tax profit of £7.8m, giving adjusted EPS of 16p (from 7.5m and 17.7p in 2013).
| COHORT (CHRT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 188p | MARKET VALUE: | £77m | |
| TOUCH: | 187-193p | 12-MONTH HIGH: | 223p | LOW: 124p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 147p* | NET CASH: | £13.6m | |
| Half-yearto 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 33.8 | 4.32 | 9.35 | 1.2 |
| 2013 | 33.2 | 1.90 | 3.95 | 1.4 |
| % change | -2 | -56 | -58 | +17 |
Ex-div: 5 Feb Payment: 5 Mar Includes intangible assets of £31.4m, or 77p a share | ||||
