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(Alliance News) - Defence and security technology firm Cohort PLC on Thursday reported strong revenue growth, helping it nearly breakeven.
Reading-based Cohort also announced the acquisition of a German company which specialises in naval sonar systems.
For the six months to October 31, revenue climbed 52% to GBP60.2 million. This was helped by acquisitions, but like-for-like revenue growth was 17%.
Cohort's pretax loss for the period was just GBP3,000, following a GBP2.0 million loss the prior year. A 61% rise in amortisation costs prevented Cohort posted a profit, however.
Cohort is paying an interim dividend of 3.20 pence per share, 12% higher than the return the prior year.
Its order intake for the half was GBP77.2 million, 69% higher than the year before, and the closing order book was 8.3% higher at GBP206.7 million. The prospects for further orders in the second half, and Cohort's next financial year, are "good".
"Cohort delivered an improved result compared to the same period last year, due to a combination of an initial first half contribution from Chess and an improvement in the underlying group, particularly at MASS," said Chair Nick Prest.
Cohort bought an 82% stake in Chess Technologies Ltd for up to GBP33 million in a deal completed a year ago. MASS is Cohort's unit which specialises in electronic warfare, information systems, and cyber security.
"The order book of nearly GBP207 million underpins a significant proportion of the second half revenue, and, as in recent years, we expect a stronger second half. The board expects Cohort's performance in 2019/2020 will be in line with market expectations," Prest added.
In a separate statement Thursday, Cohort announced the acquisition of Wartsila ELAC Nautik GmbH, or ELAC, which is based in the German Baltic port city of Kiel.
Cohort is paying EUR11.3 million for the company, which will be funded from existing cash and a credit facility. The majority of ELAC's revenue comes from naval markets, Cohort said, with a strong position in south-east Asia and Europe.
"The acquisition of ELAC is a significant step for Cohort, adding a sixth standalone business to our growing and profitable portfolio," said Cohort Chief Executive Andrew Thomis.
"It is highly complementary to our core capabilities in defence and security, with a leading position in the attractive and growing submarine and surface sonar markets, strengthening and broadening the group's existing capabilities in maritime systems."
"We are looking forward to working with the ELAC team to realise the exciting growth opportunities that this transaction will create," he added.
In 2018, ELAC posted revenue of EUR20.7 million and generated earnings before interest and tax of GBP1.4 million.
Cohort shares were 3.1% higher in London on Thursday morning at a price of 617.50p each.
By George Collard; georgecollard@alliancenews.com
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