News Column

Cohort Ups Dividend 20% As Profit Hit By Costs Of Space Business Sale

June 26, 2014

Hana Stewart-Smith

LONDON (Alliance News) - Cohort PLC Thursday upped its total dividend in the year to end-April, despite seeing profit hit by costs relating to the sale of its ailing Space business, and announced a new contract win with the UK Ministry of Defence.

The technology group posted a total dividend of 4.2 pence, up 20% from 3.5 pence.

Cohort posted a pretax profit of GBP6.7 million, down from GBP8.5 million in the previous year, as revenue rose to GBP71.6 million from GBP70.1 million, hit by an exceptional loss on the disposal of its SEA segment's Space Business.

The Space division had underperformed for a number of years, and the company was unable to stem its operating losses as delays to major programmes continued to hit the business. It sold the business to Thales Alenia Space UK Ltd in April and posted a loss on the disposal of GBP1.4 million after a write off of goodwill of GBP2.0 million.

The company's defence and aerospace business MASS saw revenue of GBP27.6 million, up from GBP24.8 million in the previous year, although its margin reduced to 18% from 20% as it shifted towards more predictable but lower-margin activities from its higher-margin but unpredictable export business.

In the SCS defence consultancy business, revenue rose to GBP14.9 million from GBP14.1 million, boosted by its focus on growing areas of the UK Ministry of Defence's budget including air domain hazard analysis and technical assurance. Cohort continues to expect the Ministry of Defence's tight contracting conditions to ease during the coming year.

In its surveillance, software and hardware development business SEA, revenue declined to GBP29.1 million from GBP31.9 million, damped as a result of a weak performance from the Space business.

Cohort said its closing order book totalled GBP81.7 million, down from GBP95.7 million, hit by the loss of the order book from the Space business.

The company noted that despite uncertainties in the wider Defence market, its order book and near term prospects underpin a good base for future progress.

Separately on Thursday, the company said it had won a GBP4 million contract from the UK Ministry of Defence for a four-year research programme with the Defence Science and Technology Laboratory. The programme will focus on integration of live and simulation systems used for defence operational training and concept development, as well as supporting equipment acquisition projects.

Shares in Cohort were trading up 0.8% at 198.00 pence Thursday morning.

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Source: Alliance News

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