Cohort (LON:CHRT ) said its subsidiary, Chess Dynamics, has been awarded three new contracts with UK and European customers, with a combined value of around £16 million.
The independent technology firm which is a parent company of five businesses based in the UK and Portugal said the three contracts cover its Naval, Land and Custom business areas.
Chess Dynamics is an operating business of Chess Technologies which Cohort acquired back in December 2018.
The group is a surveillance, tracking and gunfire control specialist that offers electro-optical and electro-mechanical systems to the defence and security markets.
Cohort, which provides a wide range of services and products for domestic and export customers in defence and related markets, said initial work for the contracts will commence within its current financial year, and deliveries will take place from 2021 through to 2028.
Commenting on the news, Andy Thomis, Chief Executive Officer of Cohort said, "These contracts further demonstrate Chess's leading technological capability in ground-based air defence, naval surveillance and high accuracy tracking and builds its export position.”
He added, “Together with other recent contract wins at Chess and across the Group, this announcement further demonstrates the visibility of our medium and long-term revenues."
Shares in Cohort have recovered from lows of 420p in April 2020 and have increased 28% in the last six months to open 3.51% higher this morning at 585p following the announcement.
Cohort told investors in July that it had secured order wins since the start of the financial year of over £50m with its order book cover standing at 75% of consensus revenue.
In a trading update published in September 2020, Cohort told investors that it continues to make good progress in its financial year ended 30 April 2020, achieving a record adjusted operating profit despite the impact of COVID-19 restrictions in the final two months.
As at 31 August 2020, Cohort’s order book stood at £210.0m, compared to £183.3m at its 30 April 2020 financial year end. This underpins approximately 83% (or £113m) of the new financial year's consensus forecast revenue, compared to 76% at the same time last year.
Cohort said it remains ‘soundly financed’ with net debt at 31 August 2020 at £1.4m, compared to £4.7m at 30 April 2020. The group’s cash stood just over £38m at 31 August 2020 providing ‘significant financing headroom for current anticipated commitments.’
The group expects trading for the 2020/21 financial year to be in line with that achieved in the year ended 30 April 2020. It also expects net debt to remain flat for the year, particularly with its acquisition of German Company ELAC which remains subject to approval.
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