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In a Trading Update for the year to 30 April 2023, Cohort plc expects performance to be slightly ahead of market expectations based on higher revenue. We note FY23 net funds reported at c.£15.0m - well ahead of ED estimated, at £4.6m - strong order intake of c.£218m (FY22: £186.7m), and a closing order book of £325m - at the Interim £304.2m. This underpins £145m, i.e. 83%, of our FY 24 estimated revenue, compared with 69% in FY23 (E). Overall, the update confirms the strength of momentum into the medium term with delivery projected to 2032.
At the Interim we raised our FY23 revenue outlook by 3% to £165m (+20%YoY) and maintained our (adj.) EBITDA outlook of £22.0m (+13.1%YoY). At this stage, our outlook remains unchanged, with the opportunity to review with full FY 23 results, and which indicates a FY23 EV/EBITDA of 8.9x; and for FY24 (E) 8.2x.
Our Fair Value remains at 650p/share.
Link to note: https://www.equitydevelopment.co.uk/research/fy-23-trading-update-ahead-and-unified
Steady as she goes. Making headway and looks set for future growth in most areas. Think the consolidation accounting wise to two segments is helpful.
What use is your analysis when the fair value you calculate on this as well as other cos and never materialises. It's pie in the sky stuff. The market is not fair. As far as I am concerned it's the same as analyst ratings on stocks. Worthless
Yes. The methodology is consistent so if the share price has appreciated beyond a fair value without any of the criteria involved in calculating a fair value having changed - the fair value will not be raised.
By definition, if our publicly stated role ( www.equitydevelopment.co.uk ) has for over 20 years to help sound and under appreciated companies become better understood by investors of all types (particularly private investors denied access to broker research) - then we are looking for businesses that our sector specialist analysts believe to be inappropriately rated .
Do equity development ever produce a note not saying fair value is above what should be? Go and produce a note to tell us why despite your fair value this sleepy outfit is underperforming?
Defence-related newsflow has remained prominent and as above Cohort has won contract extensions recently.
Its shares are on a current FY EV/EBITDA of 8.1x and Equity Development retain a Fair Value of 650p/share. New research note out that you can read/hear with free access here:
https://www.equitydevelopment.co.uk/research/closing-fy23-orders-highlight-group-attractions
or just take the loss and head for the exit. These guys are not doing anything. Just contract extensions which are more than likely already in forecasts. Very disappointed
Think the frustration is with the share price ! Some £2 below broker fair value and floundering even with the spike today.
Unlikely to be a takeover candidate in view of security issues so have to just keep shouting the merits of this modest cap value company.
But I don't see new clients or big contracts being won. All other defence cos are making a killing. Seems the BoD are sleeping and just making things ticking along until they retire. Is there anything that will wake them up?
A nice £11m extension order announced for surveillance equipment from Chess Dynamics, subsidiary of Cohort ??
This expands their order book and further underpins our forecasts and Fair Value of 650p / share, as per recent research note: https://www.equitydevelopment.co.uk/research/record-closing-order-book
Andy Thomis (Chief Executive) and Simon Walther (Finance Director) conducted a presentation covering Cohort plc’s ambitions and recent interim results, as well as sharing deeply experienced insights into the geopolitical threats currently facing the world. They then addressed a wide variety of questions posed by the live audience.
The full video recording is available below, divided into chapters:
0:00:03 Introduction to Cohort and its business model (CEO)
0:09:00 Growth strategy (CEO)
0:15:18 Financials and Order Book (FD)
0:20:31 Outlook and investment proposition (CEO)
0:28:42 Q&A
0:56:38 Conclusion
Video link: https://www.equitydevelopment.co.uk/research/cohort-plc-investor-presentation-february-2023
Cohort plc (AIM:CHRT) is an independent technology group that comprises six military, electronics and intelligence development operations spread across the UK, Germany, and Portugal. Its senior management will give an Investor Presentation that covers the group’s ambitions and recent interim results, as well as giving experienced insight into the defence threats currently facing the world.
The event will take place at 11.00am on Wednesday 1st February with Andy Thomis (CEO) and Simon Walther (Finance Director) presenting from the company.
The online presentation is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end. You can register at the following link: https://www.equitydevelopment.co.uk/news-and-events/cohort-plc-investor-presentation-1feb2023
fair value 650p
For the six months to 31 October 2022, Cohort plc reported a strong performance: revenue was up 29%YoY to £77.5m; an operating profit (adj.) of £5.0m was achieved (H1 22: £1.7m); and EBITDA (adj.) was £7.1m. Order intake of £88.6m resulted in a record closing order book of £304.2m. The interim dividend is raised 10% to 4.25p/share.
Absorption of working capital meant that H1 net debt was £0.6m; however, Cohort reports that as of 9th December net funds were £7.6m. Added to H1 revenue, over £80m of orders deliverable in the second-half equates to 95% coverage of our revised full year revenue outlook of £165.0m.
A strong interim performance, in particular by MCL, supports an increase in our FY23 revenue outlook of 3%, to £165m, growth of 19.9%YoY; while our EBITDA (adj.) outlook remains at £22.0m (up 13.1%YoY).
We maintain our Fair Value of 650p/share.
https://www.equitydevelopment.co.uk/research/record-closing-order-book
Excellent recovery. Hopefully further contract wins in forthcoming months would give this one a boost too.
Nice one guys! Now let’s get the share price back where it belongs.
Reassuring statement yesterday but market implies nothing to see here move on!
Would probably be a takeover prospect by an overseas company at this price in dollar terms but expect the security aspects would bar a foreign bid.
Hard to believe that at a time of heightened global tensions, with defence budgets being increased around the world that the CHRT stock price is going backwards!
Like the directors asleep
Commenting on the vagaries of a SP, especially CHRT given the liquidity, is frankly useless, better to look at annual report, if you think management know what their doing just trust them, and come back in a year :)
shareholders normally the last to know, could they be having a contract difficulties ? not invested here currently but always keeping a watch
Anyone with any ideas as to why?
AGM update looks confident: Cohort sees performance ahead of last year with order book now over £300m. Effective defence remains crucial; so no change to Equity Development forecasts and Fair Value of 650p/share
New research note out today along with audio audio summary. Free access here:
https://www.equitydevelopment.co.uk/research/confident-agm-statement-and-q1-update
From the latest statement today it doesn’t seem the company is struggling, just the share price!!
why when all other defence companies are booming this is still struggling?