Cohort (CHRT) welcomed an above expectation £10.7m contribution from the December 2018 acquisition of Chess Technologies, which was recently revealed as having used its counter drone technologies to help end the Gatwick Airport crisis that saw around 1,000 flights disrupted by a rogue drone in the vicinity.
The £20.1m acquisition of 81.8 per cent of Chess pushed Cohort into a net debt position of £6.4m. An improvement in working capital left Cohort’s net debt in a better position than expected, however, owing to accelerated receipts and lower supplier payments caused by programme delays. Assuming no further acquisitions, the defence specialist expects net debt to rise over the first half of FY2020 before flattening over the full course of the year, followed by a return to net funds in FY2021.
There was worse news in Cohort’s EID business, as the communication technologies specialist saw revenues slump 37 per cent to £11.5m, yielding just over £1.3m in adjusted operating profit, compared with £4.3m last year. EID’s tactical division experienced slippage of deliveries on a major contract, while the naval arm encountered “various customer driven delays and slippage of orders”. But “EID already has got more on order for the year than it delivered in 2018-19,” chief executive Andy Thomis contended, who expects a return to growth for EID.
Investec forecasts pre-tax profit and EPS of £19.4m and 35.9p, respectively, for the year to April 2020, rising to £21.1m and 40.5p in FY2021.
| COHORT (CHRT) | ||||
| ORD PRICE: | 440p | MARKET VALUE: | £180m | |
| TOUCH: | 430-450p | 12-MONTH HIGH: | 455p | LOW: 354p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 172p* | NET DEBT: | 8% | |
| Year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 100 | 5.9 | 14.0 | 5.0 |
| 2016 | 113 | 5.3 | 19.1 | 6.0 |
| 2017 | 113 | 1.0 | 9.1 | 7.1 |
| 2018 | 110 | 10.2 | 19.0 | 8.2 |
| 2019 | 121 | 5.7 | 13.4 | 9.1 |
| % change | +10 | -44 | -29 | +11 |
| Ex-div: | 22 Aug | |||
| Payment: | 18 Sep | |||
| *Includes intangible assets of £62m, or 151p a share | ||||
