Cohort Plc · LSE:CHRT
Cohort — Investor Presentation (February 2023)
30 slides from Cohort's investor presentation, Feb 1, 2023
Slide 1: Investor Presentation
Investor Presentation Andrew Thomis, Chief Executive & Simon Walther, Finance Director 1 February 2023 Cohort plc Investor Presentation February 2023 1
Slide 2: Investment Case
INVESTMENT CASE Access to Consistent Strong Business Attractive Dividend Track Model Growth Record Markets Visibility of Continued Future Earnings Financial Organic and Provided by Strength Acquisitive Substantial Growth Order Pipeline Cohort plc Investor Presentation February 2023 2 2
Slide 3: Overview
OVERVIEW • Founded in 2006, by Nick Prest (current Chairman), Stanley Carter and Andy Thomis • Listed on London Stock Exchange AIM • Six independent, innovative, agile and responsive businesses • Providing services and products in defence, security and related markets • Over 1,000 permanent employee
Slide 4: Cohort Subsidiaries
COHORT SUBSIDIARIES Applying advanced technology to protect and secure Cohort plc Investor Presentation February 2023 4 4
Slide 5: Strong Business Model
STRONG BUSINESS MODEL Being part of the Cohort Group brings significant advantages to our subsidiary businesses and their customers, compared with operating independently • Operational autonomy • Strong balance sheet • Streamlined • Inter-group Collaboration decision-making • Deep experience and clo
Slide 6: A Clear Strategy for Growth
A CLEAR STRATEGY FOR GROWTH Acquisition Organic Maintaining Growth Confidence Cohort plc Investor Presentation February 2023 6 6
Slide 7: Acquisition Strategy
ACQUISITION STRATEGY Increase the profitability of the Group and access new markets through selective acquisitions • Delivered through: • Proactive engagement with businesses that can add value to the Group. • Creativity and flexibility in structuring transactions to bridge value gaps. • What we did
Slide 8: Organic Growth
ORGANIC GROWTH Consistently grow profits and cash generation organically through our subsidiaries • Delivered through: • Focus on developing long-term customer partnerships • Identifying and pursuing growth opportunities in new and existing markets • What we did in 2021/22: • Record closing order bo
Slide 9: Five-Year Record
FIVE-YEAR RECORD Revenue (£’000) Dividend per share (pence) 110,547 121,182 131,059 143,308 137,765 8.20 9.10 10.10 11.10 12.20 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Adjusted Operating Profit (£’000) Order Book (£m) 103.80 190.90 183.30 242.40 291.00 15,225 16,164 18,223 18,609 15,525 20
Slide 10: Consensus Forecasts
CONSENSUS FORECASTS FY23e FY24e Revenue (£m) 164.6 175.5 PBT (£m) 17.7 19.7 EPS (pence) 34.5 36.2 DPS (pence) 13.3 14.6 Net cash/ (debt) 4.7 8.9 *Cohort compiled forecasts from 4 covering analysts. Correct as at 25 January 2023 Cohort plc Investor Presentation February 2023 10 10
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS Adjusted Revenue Adjusted EPS operating profit Increased revenue & operating profit £77.5m £5.0m 10.12p 29% 194% 233% (2021: £60m) (2021: £1.7m) (2021: 3.04p) Order book Order intake FY22/23 revenue cover Record order book out to 2032 & strong £304.2m £88.6m 95% revenue cover (3
Slide 12: Order Book and Visibility
ORDER BOOK AND VISIBILITY 304.2 300 58.7 ELAC MCL 24.8 CHESS 250 SEA 35.9 EID 200 MASS 150 96.3 £m 102.1 82.5 79.9 23.6 100 39.6 50 64.8 0 At 31 October 2022 H2 2022/23 2023/24 2024/25 Later Years Cohort plc Investor Presentation February 2023 12 12
Slide 13: Positive Medium-Term Outlook for Growth
POSITIVE MEDIUM-TERM OUTLOOK FOR GROWTH • Continuing geopolitical situation in Europe Big Picture • International tensions in Asia-Pacific region •UK defence and security mini-spending review expected Q1 2023 Domestic markets •Increased opportunities in Portugal •Growing orders from German domestic
Slide 14: Investment Summary
INVESTMENT SUMMARY Experienced leadership teams with core capabilities in defence and security Strong balance sheet with robust funding Track record of growing acquired businesses Dividend increased every year since IPO in 2006 Record order book out to 2032 reflects positive market outlook Cohort pl
Slide 15: Exciting long-term future as a major independent defence technology group
Exciting long-term future as a major independent defence technology group offering world-class systems to domestic and export customers alike Cohort plc Investor Presentation February 2023 15 15
Slide 16: Appendix
APPENDIX Cohort plc Investor Presentation February 2023 16
Slide 17: Shareholder Information
SHAREHOLDER INFORMATION As at December 2022: Andy Thomis 0.56 Simon Walther 0.53 Cohort plc Investor Presentation February 2023 17 17
Slide 18: Chess Dynamics
Chess Dynamics is an innovative, well-respected surveillance, tracking and gunfire control specialist for military and commercial customers. Incorporating Vision4ce Software for surveillance, tracking & fire control systems hardware Chess’s military customers include defence forces and prime contrac
Slide 19: Chess Highlights
CHESS HIGHLIGHTS H1 23 H1 22 Revenue (£m) 19.1 5.9 Operating profit (£m) 0.3 (2.7) Operating margin 1.6% (45.8%) • Stronger first half, but weaker mix of revenue • Improved cash performance • Management team making significant improvements • Stronger revenue and improved profit expected for full yea
Slide 20: EID
EID is a Portuguese high-tech company with over 35 years’ experience and deep know-how in the increasingly critical fields of electronic tactical and naval communications, command and control (3C) equipment. The company’s focus is the design, manufacture, delivery and support of advanced high-perfor
Slide 21: EID Highlights
EID HIGHLIGHTS H1 23 H1 22 Revenue (£m) 2.0 2.6 Operating profit (£m) (0.9) (0.5) Operating margin (45.0%) (19.2%) • Disappointing first half • Key order from Portuguese Navy further delayed - expected in 2023 • Closing order book underpins £13m of H2 2022/23 revenue • Not expected to recover until
Slide 22: ELAC SONAR
ELAC SONAR is an innovative German company supplying global navies with advanced sonar systems and underwater communications, located in Kiel Germany. It works with navies, system integrators and shipyards to supply mission critical hydro-acoustic naval sensors - from fully-fledged submarine combat
Slide 23: ELAC Highlights
ELAC HIGHLIGHTS H1 23 H1 22 Revenue (£m) 8.9 10.7 Operating profit (£m) 0.9 1.5 Operating margin 10.1% 14.0% • Weaker mix first half • Some delays in Government export approvals, expected to ease 2023 • Order coverage >90% for 2022/23 • H1 2022/23 saw conclusion of adjustment mechanism from Wartsila
Slide 24: MASS
MASS is a global technology company, trusted by the most secure organisations to provide advanced, cyber hardened digital services centred around data, information and knowledge. MASS has built its reputation through decades in defence, providing training, electronic warfare and cyber security servi
Slide 25: MASS Highlights
MASS HIGHLIGHTS H1 23 H1 22 Revenue (£m) 17.3 19.1 Operating profit (£m) 4.0 3.7 Operating margin 23.1% 19.4% • Improved operating profit from stronger mix of work, despite fall in revenue • Delivery constraints from Covid-19 and redeployment of customer budgets due to geo-political situation • Well
Slide 26: Marlborough Communications (MCL)
Marlborough Communications Limited (MCL is a leading supplier of advanced electronic communications, information systems and signals intelligence technology to the defence and security sectors. The company has over 40 years’ experience in supporting the UK’s ISTAR programmes including signals intell
Slide 27: MCL Highlights
MCL HIGHLIGHTS H1 23 H1 22 Revenue (£m) 13.8 7.9 Operating profit (£m) 2.2 0.5 Operating margin 15.9% 6.3% • Very strong H1 • Greater activity in supplying equipment to UK MOD • Record order book of £24.8m and good pipeline of opportunities • High tempo of activity with UK MOD continues • Working on
Slide 28: SEA
SEA delivers products and services into the defence and transport markets, alongside performing specialist research and providing services including training and product support. SEA’s engineering capabilities cover a wide range of maritime mission systems requirements including communications, ship
Slide 29: SEA Highlights
SEA HIGHLIGHTS H1 23 H1 22 Revenue (£m) 16.4 13.9 Operating profit (£m) 1.2 1.2 Operating margin 7.3% 8.6% • Very strong order intake including key five-year order from UK Royal Navy • Pipeline from domestic and export remains robust • Expect stronger second half and delivering full year performance
Slide 30: Thank You
THANK YOU Cohort plc One Waterside Drive Arlington Business Park Theale Reading RG7 4SW www.cohortplc.com Cohort plc Investor Presentation February 2023 30