Last close As at 05/08/2026
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Market capitalisation
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Research: Industrials
Cohort’s subsidiary, SEA, has continued its strong order intake momentum by announcing a major new £34m support contract for the Royal Navy. The order augments the improving prospects for SEA as sales activity normalises following the pandemic hiatus. It also further underpins future revenue visibility at the group level, which was already strong with order cover at 90% of FY23 market consensus sales estimates in July although supply chain issues remain a risk. As Cohort’s defence focus returns to organic growth in FY23, the rating looks undemanding and well below our DCF value of 684p.
Written by
Cohort |
Making good progress at SEA |
Major contract for SEA |
Aerospace and defence |
7 September 2022 |
Share price performance
Business description
Analyst
Cohort is a research client of Edison Investment Research Limited |
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Cohort’s subsidiary, SEA, has continued its strong order intake momentum by announcing a major new £34m support contract for the Royal Navy. The order augments the improving prospects for SEA as sales activity normalises following the pandemic hiatus. It also further underpins future revenue visibility at the group level, which was already strong with order cover at 90% of FY23 market consensus sales estimates in July although supply chain issues remain a risk. As Cohort’s defence focus returns to organic growth in FY23, the rating looks undemanding and well below our DCF value of 684p.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
04/21 |
143.3 |
17.9 |
33.6 |
11.1 |
15.8 |
2.1 |
04/22 |
137.8 |
14.7 |
31.1 |
12.2 |
17.0 |
2.3 |
04/23e |
164.1 |
17.6 |
34.2 |
13.4 |
15.5 |
2.5 |
04/24e |
178.2 |
19.6 |
35.6 |
14.7 |
14.9 |
2.8 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Cohort’s subsidiary, SEA, continued its strong order intake with the award of a five-year contract worth £34m to provide a systems and equipment upgrade of the anti-submarine warfare and countermeasures systems on some of the platforms crucial to the Royal Navy. There is also an option to extend for a further two years.
The order compares to SEA’s FY22 order intake of £36.8m, a year-end backlog of £75.1m and FY22 sales of £31.0m. In addition, management started the year feeling positive about prospects for export contracts following the pandemic hiatus, and we expect domestic submarine activity to return to growth as the new Dreadnought programme develops over the next few years. SEA continues to underscore its improving outlook, with the strong relationship with the UK MOD reaffirmed.
Compared to the FY22 closing order backlog of £291m, the order is also significant for the group as a whole. Together with other recent contract wins, the visibility of future group revenues is further underpinned.
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Research: Consumer
Treatt’s unexpected trading statement of 15 August reduced FY22 pre-tax profit guidance to a range of £15.0–15.3m versus our previous forecast of £21.9m (pre-exceptional rather than normalised). The main drivers of the downgrade were lower sales in tea, driven by weak consumer confidence in the United States; over-hedging, which resulted in losses crystallising due to the devaluation of sterling against the US dollar; continued input cost inflation; and slower growth in China owing to ongoing COVID-19 restrictions. All categories excluding tea are showing strong momentum, and the company is taking active steps to limit its FX exposure and prevent over-hedging in future. Management remains confident in the long-term growth drivers for Treatt.