Cohort Regulatory News (CHRT)

COHORT PLC

("Cohort" or "the Group")

Trading Update

Cohort plc, the independent technology Group, today announces an unaudited trading update for its financial year ended 30 April 2021 and outlook for the current financial year.

Summary:

· Trading performance for the year ended 30 April 2021 is in line with our expectations

· Net funds stronger than expected at c.£2m (30 April 2020: net debt of £4.7m; 31 October 2020: net debt of £6.1m)

· Record order intake of around £210m (2020: £124.4m)

· Closing order book of c.£240m (30 April 2020: £183.3m)

· The closing order book underpins £100m (63%) of the market revenue expectations for the year ended 30 April 2022 (2020: £83m, 60%)

· Acquisition of ELAC completed in the year represented a significant expansion, adding a profitable and growing sixth stand-alone business to the Cohort Group 

· While the Board's expectations for revenue growth for the current financial year are unchanged, given the expected mix of revenues and resulting margin impact, profit growth is expected to slow.

FY21 year-end update

Cohort's performance was in line with our expectations for the year. This was despite lockdown restrictions in various countries affecting our ability to carry out work on customer premises and customers' ability to witness acceptance tests and to place new orders.

During the year the Group completed the acquisition of ELAC SONAR GmbH ('ELAC'), furthering our expansion in defence products and export markets, particularly the naval sector; its initial five-month contribution and integration were in line with our expectations.

Order intake (excluding the positive effect of acquiring ELAC) was stronger than the prior year, benefiting from a £25m contract awarded in March 2021 to SEA for the management and upgrade of in-service sonar equipment for the UK Ministry of Defence, and significant contract awards at Chess, MASS and MCL.

As a result of the record order intake, the Group's closing order book grew substantially to c.£240m (2020: £183.3m), of which certain orders extend out to 2031. The strong growth in the Group's order book has given us enhanced visibility across our businesses. This is particularly so at Chess, ELAC, MASS and SEA; however, the Group has seen some potential orders delayed over the course of the year, notably at EID, in part arising from the impact of the COVID-19 pandemic. Some of these orders are now expected to be secured in 2022 and 2023.

Outlook for FY22

Despite the Group's strong closing order book, delays in the placing of certain orders with EID, representing around one third of EID's revenue, is likely to negatively affect EID's trading performance. While the overall performance of the Group's other businesses means the Group's revenue expectations are unchanged, leading to good revenue growth, the mix of revenues is expected to see a reduction in the Group's overall margin and accordingly a lower rate of profit growth.

Notice of FY21 results

It is the Group's current intention to issue its final results for the year ended 30 April 2021 in late July 2021.

Andrew Thomis, Chief Executive of Cohort, said:

"Cohort had a strong year, performing in line with our expectations despite the challenges posed by the pandemic. Our financial position ended the year stronger than expected with positive net funds. Together with our banking facilities, this provides us with the flexibility to continue to invest in the business and consider acquisitions. Notwithstanding the disappointment of delays to certain EID orders, we continued to strengthen our order book with further contract wins, and we see good prospects for further significant new orders."

ENDS

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NOTES TO EDITORS

Cohort plc (www.cohortplc.com) is the parent company of six innovative, agile and responsive businesses based in the UK, Germany and Portugal, providing a wide range of services and products for domestic and export customers in defence and related markets.

Chess Technologies, through its operating businesses Chess Dynamics and Vision4ce, offers surveillance, tracking and fire-control systems to the defence and security markets. It was acquired by Cohort plc in December 2018. www.chess-dynamics.com & www.vision4ce.com 

EID designs and manufactures advanced communications systems for naval and military customers. Cohort acquired a majority stake in June 2016. www.eid.pt 

ELAC SONAR supplies advanced sonar systems and underwater communications to global customers in the naval marketplace. Acquired by Cohort in December 2020. www.elac-sonar.de

MASS is a specialist data technology company serving the defence and security markets, focused on electronic warfare, digital services and training support. Acquired by Cohort in August 2006. www.mass.co.uk 

MCL designs, sources and supports advanced electronic and surveillance technology for UK end users including the MOD and other government agencies. MCL has been part of the Group since July 2014. www.marlboroughcomms.com 

SEA delivers and supports technology-based products for the defence and transport markets alongside specialist research and training services. Acquired by Cohort in October 2007. www.sea.co.uk 

Cohort (AIM: CHRT) was admitted to London's Alternative Investment Market in March 2006. It has headquarters in Reading, Berkshire and employs in total around 1,000 core staff there and at its other operating company sites across the UK, Germany and Portugal.