Trading in the year to 30 April was predictably uneventful for Cohort (CHRT), a small UK defence systems and training company which works mainly for the Ministry of Defence (MoD). Budgets at the MoD are fairly stable, although spending is shifting somewhat to areas in which Cohort excels, such as intelligence assets, submarines and combat aircraft.
Turnover was more or less flat year on year, as were the company’s net cash position and order book. After adjusting for adverse currency movements and exceptional costs - such as a £2m write-off of goodwill associated with the recently sold Space business - earnings per share increased slightly to 19.2p, thanks to a lower tax charge.
Looking ahead, the £6.5m sale of the loss-making Space division should boost cash generation and thus the company’s war-chest for earnings-boosting acquisitions. Investec forecasts net cash should rise to £27m at the end of the current year, up from £16.3m. In the absence of any deals, the broker has pencilled in adjusted pre-tax profits of £7.8m and £8.2m for the current year and next, giving adjusted EPS of 15.5p and 16.1p. That’s down slightly from £8.3m and 18.7p last year.
COHORT (CHRT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 201p | MARKET VALUE: | £82m | |
| TOUCH: | 197-205p | 12-MONTH HIGH: | 223p | LOW: 150p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 152p* | NET CASH: | £16.3m | |
| Year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 78.1 | 2.7 | 5.6 | 2.05 |
| 2011 | 65.1 | 2.7 | 6.8 | 2.40 |
| 2012 | 75.4 | 4.2 | 11.3 | 2.90 |
| 2013 | 70.9 | 8.5 | 20.8 | 3.50 |
| 2014 | 71.6 | 6.7 | 14.8 | 4.20 |
| % change | +1 | -21 | -29 | +20 |
Ex-div: 27 Aug Payment: 24 Sep *Includes intangible assets of £29.4m, or 72p a share | ||||
