Cohort

LN: CHRT

£180.6m market cap

441p last close

Cohort is an AIM-listed defence and security company operating across five divisions: MASS (32% of FY19 sales), SEA (32%), MCL (18%), the 80%-owned Portuguese business EID (9%) and the recently acquired 81%-owned Chess Technologies based in the UK (c five months 9%).

Investment summary

Cohort saw continued excellent order intake in H219 with £65m of multi-year orders confirmed in February for MASS and MCL. The strengthening order backlog further underpins sales for H219 and the longer term. Chess Technologies was acquired for up to £41.9m, extending both geographic reach and product range, and should enhance growth. The £3m contract from Liteye to supply electro optical tracking and control systems for counter UAS solutions for the US DOD confirms the bridgehead Chess provides for Cohort into the US market. FY19 results are now due on 23 July 2019.

Y/E Apr
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 112.7 15.7 14.5 27.9 15.8 74.2
2018A 111.0 16.4 15.2 29.5 14.9 11.4
2019E 125.9 17.8 16.3 32.3 13.7 43.8
2020E 150.8 21.1 18.9 36.1 12.2 10.0
Industry outlook

Cohort is heavily influenced by activities in defence and security (89% of FY18 sales). These markets require highly differentiated technologies and services with high barriers to entry based on customer relationships, regulation and high-level security clearances. The UK government’s commitment to spend at least 2% of GDP on defence provides greater confidence, as does the parliamentary approval for the replacement of Trident.

Last updated on 25/07/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 16
Forecast gearing ratio (%) 23
Price performance
%
1m
3m
12m
Actual (2.5) 19.2 12.8
Relative* (3.6) 18.6 15.9
52-week high/low 455.0p/354.0p
*% relative to local index
Key management
Nick Prest Chairman
Andrew Thomis CEO
Simon Walther FD

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