Cohort Plc · LSE:CHRT
Cohort — H1 2023/24 Earnings Presentation
30 slides from Cohort's earnings presentation, Dec 13, 2023
Slide 1: Applying advanced technology to protect and secure
Applying advanced technology to protect and secure Half Year Results for the six months ended 31 October 2023 Andrew Thomis & Simon Walther 13 December 2023
Slide 2: Highlights
HIGHLIGHTS Strong growth in operating profit, revenue and order book. Further progress expected. Andrew Thomis, Chief Executive
Slide 3: Group: Financial Highlights
GROUP: FINANCIAL HIGHLIGHTS REVENUE ADJUSTED OPERATING PROFIT ADJUSTED EPS Strong growth in revenue and profit £94.3m £6.0m 10.36p 22% 20% 2.4% (2022: £77.5m) (2022: £5.0m) (2022: 10.12p) ORDER INTAKE ORDER BOOK REVENUE COVER Record closing order book, visibility out to 2033, more to £119.1m £353.9m
Slide 4: Operational Highlights
OPERATIONAL HIGHLIGHTS Increased revenue in both divisions driven by higher UK MOD sales Strong profit growth Profit slightly lower Some higher margin Electronic Expected to deliver an Warfare Operation Support improved performance in H2, (EWOS) work at MASS has driving overall Group growth slipped
Slide 5: Financial Review
FINANCIAL REVIEW Simon Walther, Finance Director
Slide 6: Income Statement
Financial Review INCOME STATEMENT Six months Six months Variance ended 31 ended 31 % Oct 2023 Oct 2022 £m £m Revenue 94.3 77.5 21.7% Gross profit 31.2 33.1% 25.9 33.4% Overhead (25.2) (20.9) Adjusted operating profit 6.0 5.0 20.0% KEY NOTES • Record first half trading performance • Increase in overh
Slide 7: Net Funds Flow
Financial Review NET FUNDS FLOW Six months ended 31 Six months ended Oct 2023 31 Oct 2022 £m £m Adjusted operating profit 6.0 5.0 Working capital, depreciation 3.2 (10.9) Net funds inflow/(outflow) from operations 9.2 (5.9) Capital expenditure (2.7) (2.6) Net (purchase)/sale of own shares (1.7) 0.7
Slide 8: Earnings Per Share
Financial Review EARNINGS PER SHARE • 2% increase in adjusted earnings per share from 20% growth in adjusted operating profit Reconciled as follows: Adjusted Adjusted earnings operating profit per share £m Pence Six months ended 31 Oct 2022 5.0 10.12 100% owned businesses throughout the year 0.7 1.4
Slide 9: Communications and Intelligence
Divisional Highlights COMMUNICATIONS AND INTELLIGENCE Six months Six months ended 31 Oct ended 31 Oct 2023 2022 Revenue (£m) 43.9 33.2 Adjusted operating profit (£m) 6.0 5.2 Operating margin 13.7% 15.7% KEY NOTES • Strong first half performance from the Communications and Intelligence division • Hig
Slide 10: Sensors and Effectors
Divisional Highlights SENSORS AND EFFECTORS Six months Six months ended 31 Oct ended 31 Oct 2023 2022 Revenue (£m) 51.0 44.5 Operating profit (£m) 2.3 2.5 Operating margin 4.5% 5.6% KEY NOTES • Sensors and Effectors performed well, with Chess delivering an improved performance • Marked increase in h
Slide 11: Progress on ELAC Sonar's New Facility in Kiel
PROGRESS ON ELAC SONAR’S NEW FACILITY IN KIEL 11
Slide 12: Outlook
OUTLOOK Andrew Thomis, Chief Executive
Slide 13: Outlook for Growth: Big picture
Outlook OUTLOOK FOR GROWTH Big picture Continued conflict in Central/Eastern Europe, renewed conflict in Middle East SE Asia/Indo-Pacific allies continue to invest in security and defence Export markets Domestic markets Operations • New and existing NATO members • UK maritime driving overall • Suppl
Slide 14: Recent Maritime Wins
RECENT MARITIME WINS Contract In-year Long-term value value value Dreadnought £17m Medium High Italian Navy 3rd Unit €16m Low High New Zealand Frigate Upgrade £26m Medium High KraitSense (Southeast Asia OPV) £7m Low Medium Hawk and Celt Camera Sales £5m High Low Underwater Telephone €4m High Low 14
Slide 15: Showcasing Our Leading Technology
SHOWCASING OUR LEADING TECHNOLOGY H1 2023/24 spend over £6.4m Submarine sonar array panel High-performance trainable Multi Sensor Unit (MSU) decoy launcher system Image: OCCAR-EA 15
Slide 16: Record Order Book
RECORD ORDER BOOK Delivery of the Group’s order book into revenue Communications and Intelligence Sensors and Effectors 400.0 Total 353.9 350.0 300.0 250.0 £ MILLIONS 245.6 200.0 150.0 Total 117.6 Total Total 100.0 90.8 Total 81.9 76.3 63.6 108.3 60.3 50.0 65.9 43.1 30.5 41.3 20.5 16.0 - 16
Slide 17: Strong Revenue Visibility
STRONG REVENUE VISIBILITY ORDER BOOK 31 October 2023 To be delivered H2 31 October 2022 To be delivered H2 £m 2023/24 £m 2022/23 £m £m Communications and Intelligence 108.3 30.5 113.3 41.6 Sensors and Effectors 245.6 60.3 190.9 42.6 353.9 90.8 304.2 84.2 KEY NOTES • Higher level of order book to be
Slide 18: Summary & Outlook
SUMMARY & OUTLOOK Continued growth in revenue and profit, on track to meet full year expectations Record order book and strong pipeline of opportunities reflects market growth developments Order intake of 1.3x revenue demonstrates strong demand and competitive positioning Strong balance sheet for in
Slide 19: Exciting long-term future as a major independent UK defence technology group
Exciting long-term future as a major independent UK defence technology group offering world-class systems to domestic and export customers alike 19
Slide 20: Questions
QUESTIONS COHORT PLC THE INDEPENDENT TECHNOLOGY GROUP
Slide 21: Appendix
APPENDIX COHORT PLC THE INDEPENDENT TECHNOLOGY GROUP
Slide 22: Applying advanced technology to protect and secure
Applying advanced technology to protect and secure We create solutions to keep people safe. Acting with agility to find a better way, make smart decisions and meet customers’ needs. Where independent subsidiaries are free to grow and deepen relationships with the support of a steadying hand. Bringin
Slide 23: Cohort Business Model
COHORT BUSINESS MODEL Subsidiaries enjoy a significant Group operates a light-touch degree of operational but rigorous financial and autonomy to develop their strategic control regime potential fully Cost-effective and avoids Streamlined decision- additional layers of making and focus on managem
Slide 24: Acquisition Strategy
ACQUISITION STRATEGY Continue to see opportunities to accelerate growth by making targeted acquisitions in the UK and overseas Stand-alone acquisitions Bolt-in acquisitions Likely to be operating in defence and To be integrated with an existing group security markets business Ready to join a l
Slide 25: Corporate History
CORPORATE HISTORY • IPO in March 2006 • No share issue since 2007 2006 2007 2010 2014 2016 2017 2018 2020 Cohort plc SEA acquired for Abacus EW Space division Majority stake EID holding Chess acquired ELAC acquired founded £25m acquired disposal £6.5m acquired in EID increased to 80% for £20.1m for
Slide 26: Communications and Intelligence
Communications and Intelligence The Communication and Intelligence division brings together three of our businesses which have a focus on communications systems, intelligence gathering and analysis, including electronic warfare for mainly defence and security customers. This they provide through bot
Slide 27: Sensors and Effectors
Sensors and Effectors The Sensors and Effectors division brings together three of our businesses with a focus on technology products and systems which enable our customers, primarily in the naval and land domain to detect, acquire, track and respond to threats, whether land, air or sea based. • Ches
Slide 28: Reporting Divisions: Financial Highlights
Overview REPORTING DIVISIONS: FINANCIAL HIGHLIGHTS Communications and Intelligence REVENUE 43.9 51.0 H1 2023/24 (£m) 2.3 PROFIT H1 2023/24 (£m) 108.3 6.0 Sensors and Effectors ORDER BOOK H1 2023/24 Communications and (£m) Intelligence 245.6 Sensors and Effectors 28
Slide 29: Quarterly Profile of Group Revenue
QUARTERLY PROFILE OF GROUP REVENUE 2017/2018 2018/2019 2019/2020 2020/2021 2021/2022 2022/2023 2023/2024 Average % % 35.0 32.8 30.0 27.2 25.0 21.8 18.2 20.0 15.0 10.0 5.0 0.0 Q1 Q2 Q3 Q4 29
Slide 30: Thank You
THANK YOU Cohort plc One Waterside Drive Arlington Business Park Theale Reading RG7 4SW www.cohortplc.com