Cohort PLC Reports Robust H1 Revenue Growth and Sustains Strong Order Book

Cohort PLC half-year 2025: revenue up, margins mixed, order book still chunky

Cohort PLC has posted a solid first half for the six months to 31 October 2025. Revenue rose 9% to £128.8m, helped by the first-time contribution from EM Solutions and growth across most businesses. Adjusted operating profit eased to £9.7m, as expected, as lower-margin programmes weighed on the Sensors and Effectors division.

The order book remains very strong at £604.5m, with over £145m due for delivery in H2. That, combined with H1 revenue, covers 94% of full-year consensus revenue – and 96% by early December. The Board has lifted the interim dividend 10% to 5.80p, signalling confidence in the outlook.

Key numbers investors should know

Metric	H1 2025/26	H1 2024/25
Revenue	£128.8m	£118.2m
Adjusted operating profit	£9.7m	£10.1m
Adjusted operating margin	7.5%	8.6%
Adjusted EPS	16.16p	20.00p
Order intake	£122.3m	£139.2m
Order book (period end)	£604.5m	£616.4m (30 Apr 2025)
Net debt/(funds)	£32.5m debt	£5.3m funds (30 Apr 2025)
Cash flow from operations	£27.9m outflow	£34.7m inflow
Interim dividend	5.80p	5.25p

Note: “Adjusted” excludes FX mark-to-market, amortisation of acquired intangibles, exceptional items and acquisition costs.

What drove the half: a tale of two divisions

Communications and Intelligence stepped up

• Revenue rose to £62.3m (from £55.2m) and adjusted operating profit to £10.4m (from £8.5m), lifting margin to 16.8%.
• EM Solutions delivered a maiden contribution, while MASS and EID improved. MCL was lower after a record prior period.
• Order book nudged up to £203.6m, helped by MASS’s Electronic Warfare Operational Support and wins for EM Solutions in Australia and Norway.

Takeaway: this is the engine room right now. High-teens margins in C&I show the portfolio balance and pricing power when programmes are in the sweet spot.

Sensors and Effectors hit by mix

• Revenue edged up to £66.6m, but adjusted operating profit fell to £3.2m, with margin down to 4.8%.
• Drivers were expected: heavy low-margin deliveries on the Italian sonar programme at ELAC SONAR as the first boat system nears completion, plus low-margin work at SEA.
• Chess returned to profit but sits at a 5% margin, with management targeting mid-teen margins by 2027/28.
• Order book closed at £400.9m after £58.8m intake; pipeline remains healthy across Krait, counter-drone, Ancilia and sonar solutions.

Takeaway: the profit dip is a mix issue rather than a demand issue. The programme phasing should improve in H2, which management is guiding to.

Order book and outlook: revenue cover already high

The £604.5m order book remains the key comfort blanket. More than £145m is earmarked for H2 delivery. Together with H1 revenue, this covers 94% of full-year consensus revenue, rising to 96% in early December. In plain English: visibility is excellent.

Management keeps the full-year outlook unchanged across revenue, adjusted operating profit, adjusted EPS and closing net funds. They also continue to signal mid-teen operating margins for the Group over the coming years as mix normalises and operating leverage improves.

Cash, debt and investment: near-term squeeze for long-term gain

Net debt moved to £32.5m at period end from £5.3m net funds at April. This was flagged and reflects planned capital expenditure and working capital build ahead of record H2 deliveries. Operating cash flow was an outflow of £27.9m, with inventories and receivables building and payables falling.

• Capex was £10.3m, including £7m on ELAC SONAR’s new Kiel facility, part of a roughly £21m multi-year project delivered on time.
• SEA’s non-core Transport business was sold on 30 June 2025 for £5.9m net proceeds, generating a £0.5m exceptional gain.
• Loan facilities: £50m revolving credit facility in place to July 2027; discussions for a new facility are underway, expected before July 2026 results.

Takeaway: the balance sheet can handle the working capital swing. The test is delivery in H2 to convert that order book into cash and exit back to net funds as guided.

Dividend raised 10%: dates you need

• Interim dividend: 5.80p per share (was 5.25p).
• Record date: 9 January 2026.
• Payment date: 17 February 2026.
• DRIP election deadline: 26 January 2026. Details at shareview.co.uk/info/drip.

Growing the dividend in a year of heavy H2 weighting is a confident signal from the Board.

What changed under the hood: mix, headcount and acquisitions

• Headcount up to over 1,600, including 125 from EM Solutions, to support growth.
• New facilities opened in La Spezia (supporting the Italian Navy) and Ottawa (SEA manufacturing and support for the Royal Canadian Navy).
• EM Solutions acquisition is now fully accounted for: £48.8m of identifiable intangibles, £32.1m goodwill and strong early contribution.

Jargon check: “Adjusted EPS” strips out non-cash or non-trading items like amortisation of acquired intangibles. It is commonly used to assess underlying performance.

Positives and watch-outs for retail investors

Why the update reads positively

• Revenue growth of 9% with clear momentum in Communications and Intelligence.
• Order book of £604.5m with high near-term delivery cover – few AIM companies enjoy this level of visibility.
• Dividend up 10% and full-year guidance unchanged.
• Portfolio actions are sensible: adding EM Solutions, exiting SEA Transport, and investing in capacity where demand is tangible.

What to keep an eye on

• Margins: Sensors and Effectors at 4.8% is well below Group ambition. H2 needs to show the expected snap-back.
• Cash conversion: a £27.9m operating cash outflow is fine for a build phase, but delivery risk in H2 is the swing factor for year-end net funds.
• Order intake: £122.3m was below last year and below revenue (0.9x book-to-bill). Not alarming given the large order book, but one to track.
• Programme mix: low-margin Italian sonar deliveries will fade, but any extensions or delays could keep pressure on margins.

My take: solid progress with a clear second-half execution task

There is a lot to like here. Cohort is growing, generating high-quality work in areas NATO customers care about, and has the order book to match. The C&I division is doing the heavy lifting and EM Solutions already looks like a smart deal. The dividend rise reinforces the message.

The rub is mix and cash. Management has set the expectation for a stronger second half, better margins and a return to net funds. If they deliver – and the visibility suggests they can – the narrative shifts back to mid-teen margins and compounding growth. Miss the H2 execution, and the shares will likely pause for breath.

For those who can live with programme phasing bumps, the strategic direction remains attractive. You can find the analyst presentation recording at cohortplc.com/investors/results-reports-presentations.