Cohort

LN: CHRT

£156.7m market cap

382.5p last close

Cohort is an AIM-listed defence and security company which following the acquisition of Chess Technologies operates across five divisions. MASS (34% of FY18 sales); SEA (34%); MCL (16%); and the 80%-owned Portuguese business EID (17%).

Investment summary

Following a challenging H119, Cohort has seen excellent order intake in recent months. These underpin anticipated sales for H219 and provide longer-term visibility for MASS and EID in particular through some significant multi-year agreements. EID and MCL are focused on executing sizeable H219 opportunities. The purchase of Chess Technologies extends both geographic reach and product range and should enhance growth. The acquisition for up to £41.9m is aligned with the agile growth strategy and was financed through cash and the recently renewed bank facility.

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 13.7 64.4
2018A 111.0 16.4 15.2 29.5 13.0 9.9
2019E 125.9 17.8 16.3 32.3 11.8 38.0
2020E 150.8 21.1 18.9 36.1 10.6 8.6
Last updated on 15/02/2019
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 15/02/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 16
Forecast gearing ratio (%) 23
Price performance
%
1m
3m
12m
Actual (0.7) (8.9) 5.8
Relative* (5.0) (11.2) 6.5
52-week high/low 422.0p/338.0p
*% relative to local index
Key management
Nick Prest Chairman
Andrew Thomis CEO
Simon Walther FD

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