Cohort Share Discussion Threads

[xtrmntr] 13/12/2024 18:14

From the IC.There have been some recent jitters amongst defence stocks after US president-elect Donald Trump called for an "immediate ceasefire" in Ukraine. But the war has highlighted long-term underinvestment in defence and security in Europe, as has the incoming US administration's more antagonistic view of Nato. Aim-traded mini-defence conglomerate Cohort (CHRT) is navigating this demand context well, and is benefiting from heightened tensions in the Asia-Pacific and Middle East, evidenced by the company's disclosure of a record order book and revenue growth of a quarter in its first half. Sales to the UK Ministry of Defence (MOD), which contributed an increased 56 per cent of total revenue in the half, drove the revenue and profit performance. Both the communications and intelligence and sensors and effectors units delivered robust adjusted operating profit growth, as profit jumped 69 per cent to £10.1mn. The net margin improved from 6.4 per cent to 8.5 per cent, with progress being made towards management's medium-term mid-teen target. Encouragingly, management expects its Portuguese communications systems business EID, which has been loss-making over the past couple of years, to return to profit over the full year on the back of "long-awaited" naval orders. The order book sat at £541mn at the period-end, up from £519mn in April. and representing an order cover of 99 per cent of the analyst consensus for annual revenue. Order intake of £139mn was 1.2 times revenue in the half. Meanwhile, the £74mn acquisition of high-margin naval defence communications business EM Solutions (the transaction is expected to complete imminently) provides a tasty long-term opportunity. Clients include the Australian navy, Norwegian navy and Dutch defence department. The deal was part-funded through a £41mn share placing and retail offer. Chief executive Andy Thomas said the company was in discussions with more "big potential customers" for EM Solutions. Net funds improved by £15mn to £37.9mn, although a net cash outflow is anticipated in the second half, given capex, working capital movements and the EM Solutions purchase. Cohort trades on 20 times forward consensus earnings, a higher rating than at Chemring (CHG), as well as bigger sector beasts BAE Systems (BA.) and Lockheed Martin (US:LMT). The share price has more than doubled over the past year. But, as analysts at Shore Capital argued, Cohort is "visibly becoming a strategic supplier with clients, justifying a premium valuation", and there is an expectation of "strong news flow continuing for shareholders". We remain bullish on the outlook. Buy.

[robertball] 12/12/2024 17:47

I don't know about that. Likely to tread water for next year. Positive sentiment will limit downside

[estienne] 12/12/2024 09:15

Cohort own some very necessary military tools and I think the share price will double in the near term

[metis20] 11/12/2024 20:05

"EM Solutions has operated predominantly as a standalone business since being acquired in 2019 to support the SpaceLink operations which EOS has since exited. Whilst attractive, growing and profitable business, we believe its future success and growth prospects will be more fully realised under Cohort’s ownership."

[tomtrudgian] 11/12/2024 18:32

Sorry, 2019 not 1909!

[tomtrudgian] 11/12/2024 18:27

EM Solutions pty ltd, the Australian naval SATCOM company was bought by Australian EOS Holdings Ltd as a small subsidiary in 1909 for about 19m Au dollars I understand from local Au reports. It is now apparently being bought by Cohort plc for about 144m Au dollars.

I have failed so far to find any specific EM financial results as their results are combined within those of the EOS group, but am searching the Australian company registries and media.

Two questions:
Are Cohort overpaying for EM?
How and why did EM get quickly and so greatly in debt that EOS wished to sell it?

Cohort’s interim results were quite superb, as so often. However were they able to perform adequate due diligence on EM? Any help would be appreciated.

Tom Trudgian

[robertball] 11/12/2024 16:29

It's been this high before. May bounce upto £12...here's hoping...

[wad collector] 11/12/2024 15:17

Shaker I think that is probably good timing , I suspect a steady slow rise from here not a continuation of the doubling in the last yr. I am debating slicing some off too but trying to juggle CGT as mine are unfortunately outside my ISA. I only buy lemons in my ISA.

[martinmc123] 11/12/2024 10:24

4*
Cohort the independent technology group posted impressive Interims this morning with record first half performance and strong growth in adjusted operating profit, revenue and the order book. Revenue, adjusted operating profit and net funds were all ahead of recent guidance with revenue up 25% to £118.2m, adjusted operating profit up 69% to £10.1m at a net margin of 8.5% up from 2023 6.4% and adjusted earnings per share...from WealthOracle

wealthoracle.co.uk/detailed-result-full/CHRT/1080

[shaker45] 11/12/2024 09:59

I topped sliced quite a few last time share price was over 1050. Wondering whether to repeat? Buy the rumour sell the news perhaps-seems quite volatile today.

[wad collector] 11/12/2024 09:23

P/E is high even before today's rise , but this reflects the strong niche.
I like the last line
"Overall, we continue to see a positive outlook for organic growth in the years ahead."
That is what makes it a hold for me, not the 5p divi.

[robertball] 11/12/2024 08:27

Positive update

[lovely_jubbly] 11/12/2024 08:04

Bosh! There we go...

[edmonda] 11/12/2024 07:30

Cohort (LON:CHRT) - H1'25 results: records continue to tumble - link to latest research:

For the six months to 31 October 2024 Cohort reported revenue (adj.) operating profit and net funds ahead of recent guidance: revenue +25%YoY at £118.2m, (adj.) EBIT +69%YoY to £10.1m and net funds at 31 October of £37.9m. Order intake of £139.2m compared to £119.1m a year earlier, with a record closing order book of £541.1m. EPS (adj., dil.) was 19.8p (H1 24: 10.3p) and the interim dividend was raised by 12%YoY to 5.25p/share.

Communications & Intelligence delivered revenue of £55.2m, +26%YoY and (adj.) EBIT of £8.5m, +41%YoY, a 15.4% margin compared to 13.7% a year earlier; the order book increased from £108.8m in April to £134.4m. Sensors & Effectors posted revenue of £64.2m, +26%YoY and (adj.) EBIT of £5.3m, +1.3x, an 8.3% margin compared to 4.5% in H1 24. Its closing order book was £406.8m (April, £410.7m) with H2 order intake expected to exceed revenue.

Post period-end, Cohort announced a conditional sale and purchase agreement to acquire Australian satellite communications specialist EM Solutions (Europe) B.V., for an enterprise value of c.£75.0m. The acquisition will take the Group pro forma order book to above £650m.

Recent events in Syria, the ongoing conflicts in Israel the Ukraine, and with persisting tension in the Far East / Asia Pacific region, serve as reminders of the importance to the UK of retaining an efficient and modernised defence capability.

We retain our Fair value / share of 1090p. That price is indicative of a FY26E PE of 19.0x compared to a peer group market cap weighted average of 22.2x, and EV/EBITDA of 10.1x, compared to 12.5x

[lovely_jubbly] 11/12/2024 07:26

yeh imagine it's got to be partly priced in... but people would be mad to sell following that. I hope they do though.. happy to load up more on any dip.

[t2672] 11/12/2024 07:14

Wondering the same but my personal opinion is that this could react nicely today, lots of positives now for price to build on going forward (even if not today) so good news either way!

[robertball] 11/12/2024 07:10

Exceeds guidance but how much was priced in?

[lovely_jubbly] 11/12/2024 06:16

Big day today chaps! Wishing you all the best.

[robertball] 22/11/2024 15:02

Got scaled back too by AJBell. 75% awarded.

[stewpot3] 22/11/2024 13:24

I clicked through to corporate actions. It then asked me to click on relevant event details. There was nothing to click. Probably me being thick.

[robertball] 22/11/2024 12:59

Yes all very quick. You only have @4 hours after release of the RNS and even then it's first come first serve.

[dozey4] 22/11/2024 12:46

Skyracer: I have been a shareholder for years and sliced a little earlier. Why make foolish assumptions. I’m aggrieved at the hasty nature of these types of placing. It disadvantages large sections or the shareholder population.

[wjccghcc] 22/11/2024 12:23

It was a corporate action. The number of actions you have are highlighted at the top of the portfolio page. Click through to enter the amount of cash you want to deploy in the placing.

[robow] 22/11/2024 11:24

Stewpot same as me