The UK defence technology sector has received a significant boost from escalating global conflicts and NATO's renewed focus on military spending, sending Cohort's order book surging to a record-high £618.8m. The AIM-listed group reported a 13 per cent year-on-year increase in revenue to £306.4m for the financial year, with a concurrent 10 per cent jump in order intake to £314.2m.
Chief Executive Andrew Thomis attributed the surge in demand to ongoing tensions across multiple regions, including Ukraine and the Middle East, as well as pressure from the US on NATO member states to increase their defence budgets. This has led to both domestic UK customers and international exporters driving growth for Cohort's communications and intelligence division, which recorded a 27 per cent rise in revenue.
Notably, Cohort's sensors and effectors arm reported a flat performance due to internal production issues and supply chain delays linked to its Chess acquisition. However, the company is investing £15m into Chess with the aim of consolidating operations onto a single site, streamlining processes and increasing capacity. This is expected to yield improved results in coming years.
The firm has secured 88 per cent of its revenue expectations for the next financial year, thanks in part to a recent wave of new orders and contract wins. Additionally, Cohort has positioned itself for potential future mergers and acquisitions by tripling its debt limit to £175m and securing an option to borrow up to £50m further if required.
Chief Executive Thomis expressed optimism about the UK's Defence Investment Plan (DIP), particularly its emphasis on new technologies such as a 'hybrid navy', 'Atlantic Bastion', and the protection of underwater infrastructure. However, he acknowledged ongoing discussions within the Treasury regarding the feasibility of meeting the government's pledge to spend 3.5 per cent of GDP on defence by 2035, with a review expected in the next parliament.