Cohort (CHRT)

Business description

Cohort is an AIM-listed defence and security company operating across four divisions: MASS (30% of FY18e sales); SEA (40%); MCL (15%); and the 80%-owned Portuguese business EID (15%) acquired in FY17.

Y/E Apr Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 112.6 13.0 12.0 27.2 12.6 16.4
2017A 112.7 15.7 14.5 27.9 12.3 36.4
2018E 119.0 16.6 15.4 29.1 11.8 9.9
2019E 128.2 17.4 16.1 31.2 11.0 9.3

Last updated on 21/03/2018

Investment summary

Cohort is agile in nature, executing contracts that are often fixed price. As the company holds risk and builds contingency, this can be unwound typically at the year-end, essentially skewing H1/H2 performance. Once again, we expect to see a stronger H2, with the H218 outlook supported by order cover and recent order wins. Management has reiterated FY guidance. While the company is not immune to UK MoD budgetary delays, it continues to exploit export opportunities and remains positioned for further M&A opportunities, should they arise.

Last updated on 06/04/2018

Industry outlook

Cohort is heavily influenced by activities in defence and security (90% of FY17 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 06/04/2018

Key management

Nick Prest, Chairman
Andrew Thomis, CEO
Simon Walther, FD

Company address

2 Waterside Drive
Arlington Business Park
Theale
Reading
RG7 4SW
United Kingdom
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