Cohort PLC Reports Strong Growth and Record Order Book in FY25 Trading Update

A Robust Year and a Record Order Book: Cohort’s Impressive FY25 Update

Cohort PLC just dropped their full-year trading update, and defence investors should be paying attention. The headline? Strong growth, a record order book, and strategic moves that position this UK tech group for sustained momentum. Let’s dissect what this means.

The Standout Figures

Cohort delivered exactly what the market wanted:

• Revenue & profit growth comfortably met expectations, building on last year’s performance
• A record £615m closing order book – that’s nearly £100m higher than last year’s already solid £518.7m
• Positive net funds exceeding £5m – significantly better than anticipated despite their acquisition spree
• Order intake of c.£285m (excluding EM Solutions’ contribution) maintaining the crucial pattern of intake exceeding revenue

Most impressively? That bulging order book now covers around 80% of FY26 revenue expectations – providing serious visibility in an uncertain world.

Divisional Dynamics: A Tale of Two Halves

Digging deeper, the performance wasn’t uniform across Cohort’s structure:

Communications & Intelligence Division

• Star performer with excellent organic growth
• Net margins expanded to around 17% (up from 15.5% last year)
• Benefitted from the initial contribution of EM Solutions

Sensors & Effectors Division

• Broadly flat trading profit despite higher revenue
• Margins dipped to just under 9% (down from over 10%)
• Attributed to weaker margin mix at SEA and one-off project delays/costs at Chess

Strategic Chess Moves: Acquisitions & Disposals

Cohort isn’t sitting still. Two significant plays shape their future:

• The EM Solutions Acquisition (£75m): Their largest ever, funded through a £41m placing, cash, and debt. This Australian satellite communications specialist broadens Cohort’s naval systems offering and taps into the critical Indo-Pacific defence market. Integration’s on track.
• Transport Division Disposal (>£8m): The small non-core unit (within Sensors & Effectors) is being sold. Post-deal, non-defence revenue shrinks to just ~3%, sharpening Cohort’s defence/security focus.

Order Book: The Engine for Future Growth

Beyond the record £615m headline:

• Order intake remains healthy, sitting at 1.1x annual revenue (even after excluding last year’s £135m Royal Navy anomaly)
• Revenue visibility now stretches into the mid-2030s – a rarity that de-risks the investment case

Outlook: Defence Tailwinds Remain Strong

Management’s tone is confident, underpinned by:

• Robust demand drivers: Ongoing conflicts and Indo-Pacific tensions fuel global defence spending
• AUKUS alignment: EM Solutions positions Cohort perfectly within this crucial security pact
• Margin ambition: Clear aim to lift group net margins towards the “low to mid-teen %” range

CEO Andrew Thomis hit the nail on the head: “Our strong balance sheet provides a robust platform from which to continue to invest… while considering selective acquisitions.”

The Bottom Line for Investors

Cohort’s update ticks the boxes: delivery against expectations, strategic portfolio refinement, and outstanding visibility through that £615m order book. The EM Solutions integration and margin progression in Sensors & Effectors are key watchpoints. With prelims due July 16th, this trading update sets a very solid foundation. Cohort continues to demonstrate why it’s a serious player in the defence tech arena – executing its playbook with discipline. One to keep firmly on the radar.