Cohort Beats EPS Forecasts on Strong Export Demand, Lifts Dividend 10%

UK defence technology company Cohort Plc announced full-year adjusted earnings that surpassed analyst expectations, fueled by a surge in export activity amid rising global defence spending. The company also raised its dividend and reported a record order book, signaling confidence in future growth despite missing consensus on pretax profit.

Earnings Breakdown

For the fiscal year, Cohort reported an adjusted earnings per share (EPS) of £0.62, narrowly beating the £0.60 consensus estimate from seven analysts. However, pretax profit came in at £32.60 million, falling short of the anticipated £34.51 million. The company's basic EPS was £0.52.

Key financial highlights from the report include:

• Total revenue increased by 13% year-over-year.
• The dividend per share was increased by 10%.
• The company's order book reached a record high, providing significant revenue visibility.

Divisional Performance

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The strong results were primarily driven by Cohort's Communications and Intelligence division, which saw robust profit growth. This performance was supported by a full-year contribution from its EM Solutions subsidiary and nearly 20% growth at its MASS unit. The company attributed the revenue increase to heightened export demand from NATO members in Europe, as well as from Australia and Germany.

In contrast, the Sensors and Effectors division delivered a weaker performance. Revenue was flat and profit declined, which the company linked to a less favorable product mix at its SEA subsidiary, legacy projects, and the performance of Chess Dynamics.

Outlook and Guidance

Looking ahead, Cohort provided an optimistic outlook, targeting double-digit earnings growth for fiscal year 2026/27 and the two subsequent years. The company's record order book already underpins approximately £264 million of revenue for the 2026/27 fiscal year, covering about 88% of the year's expected total.

Management also expects operating margins to improve, forecasting a rise to the low-teens in 2026/27 with a long-term goal of reaching the mid-teens by the end of the decade. This forward guidance suggests a clear strategy for enhancing profitability alongside revenue growth.