Shares of British defense technology firm Cohort (LON:CHRT) experienced a significant surge of over 12% on Wednesday. This notable increase followed the company's release of its financial results for the fiscal year ending April 30, 2026. The reported figures for adjusted operating profit and revenue both surpassed the consensus expectations previously set by market analysts, signaling a robust performance for the company.
According to details presented in Cohort's regulatory filing, the company's revenue for the fiscal year reached approximately £303 million. This figure represents a beat of 3.1% against the analyst forecast of £293.9 million. Furthermore, Cohort's adjusted operating profit for the same period was reported at around £36 million, exceeding the anticipated £34.7 million by 3.7%. These positive financial outcomes underscore a strong operational year for the defense technology specialist.
Adding to investor confidence, Cohort announced a record closing order book of £620 million. This figure marks an increase from the £615 million recorded at the close of the previous fiscal year on April 30, 2025. The substantial order book provides a significant level of revenue visibility, covering approximately 80% of the current market's revenue expectations for the upcoming 2026-27 financial year. This coverage is an improvement from the 78% recorded in the prior year and compares favorably to the five-year average of 72%, indicating a healthy pipeline of future business.
Order intake for the fiscal year also demonstrated healthy growth, reaching approximately £313 million. This represents a notable increase from the £284 million recorded in the preceding year. The second half of the fiscal year was particularly strong, with order intake amounting to £191 million, which was 31% higher than the corresponding period in the prior year. This acceleration in order intake was specifically highlighted by RBC analyst Ben Pfannes-Varrow.
Cohort's operational segments contributed positively to the overall financial results. The Communications and Intelligence division reported revenue of approximately £163 million, accompanied by a net margin of around 20%. This represents an improvement from the 16.8% net margin reported in the 2025 fiscal year. The division's performance benefited from a full-year contribution following Cohort's acquisition of EM Solutions in January 2025, integrating the acquired entity's operations fully into its reporting.
In contrast, the Sensors and Effectors division experienced a slight decrease in its net margin, reporting around 7% compared to 8.6% in the 2025 fiscal year. The company attributed this reduction to ongoing pressure on a specific contract and the strategic sale of SEA’s high-margin transport business, which was completed in June 2025. Despite this divisional performance, the company's overall financial year was strong.
Regarding the company's liquidity position, closing net funds stood at £2.9 million. This figure was below the company's internal guidance range of £10 million to £15 million and represented a decrease from the £5.3 million reported a year earlier. Cohort noted that receipts exceeding £6 million were recognized in the first quarter of the 2026/27 financial year, having been received in May 2026. This timing of receipts, occurring in the early part of the new fiscal year, impacted the year-end net fund position.
To support its ongoing operations and future growth initiatives, Cohort announced the signing of a new five-year bank facility totaling £175 million during the reporting period. This facility is designed to provide enhanced financial flexibility and strengthen the company's capital structure, ensuring adequate resources for strategic objectives.
Chief Executive Andrew Thomis expressed satisfaction with the company's performance, stating, "Cohort performed strongly in 2025/26, exceeding market expectations. Following another year of strong order intake, our closing order book has reached a new record level, and we have encouraging prospects for further orders." He further added that the high level of order cover provides confidence in a strong 2026/27 financial year, underscoring the visibility of future revenue streams.
Analysts at RBC Capital Markets reaffirmed their positive outlook on Cohort, maintaining an "outperform" rating and setting a price target of 1,740 pence. This reflects the firm's confidence in Cohort's continued growth trajectory and its market position within the defense technology sector.
Consensus forecasts for the 2026-27 financial year, as detailed in the RBC note, project revenue of £317 million, adjusted earnings before interest and taxes (EBIT) of £41.1 million, and adjusted earnings per share of 65.17 pence. These projections suggest continued growth and profitability for Cohort in the upcoming fiscal year, based on current market conditions and company performance.
The broader market context on Wednesday presented a mixed picture. Major indices like the S&P 500 and Nasdaq closed at all-time highs, partly propelled by a significant surge in Micron Technology shares, which pushed the semiconductor company's market capitalization to $1 trillion. This tech-driven rally occurred against a backdrop of persistent geopolitical concerns, including ongoing tensions surrounding Iran, which contributed to fluctuations in oil prices. The market's attention was thus divided between the strong performance of technology stocks and broader global economic and political uncertainties.
Micron Technology's stock achieved a significant milestone, reaching a $1 trillion market capitalization for the first time. This achievement was accompanied by analyst optimism, with UBS projecting more than 100% upside potential for the stock from its current levels. The surge in Micron's stock was a key driver for the broader technology sector rally observed on Wall Street, influencing other technology and semiconductor-related equities.
The performance of Cohort's shares is particularly noteworthy within the defense technology sector. Companies operating in this industry often benefit from increased geopolitical tensions and government defense spending. Cohort's strong order book and its ability to exceed financial forecasts suggest a resilient business model capable of navigating complex market conditions and capitalizing on opportunities within its sector.
The company's strategic decisions, such as the acquisition of EM Solutions and the sale of its high-margin transport business, indicate a focused approach to optimizing its portfolio and enhancing profitability. These moves, coupled with strong order intake, position Cohort for sustained growth and potentially further share price appreciation, as suggested by the RBC Capital Markets' rating and price target.
The financial facility of £175 million provides Cohort with the necessary resources to fund its operations, pursue strategic initiatives, and potentially invest in research and development, which is crucial in the competitive defense technology landscape. This financial strength, combined with a record order book, underpins the company's outlook for the upcoming fiscal year.
Investors will be closely monitoring Cohort's progress in securing new orders and managing its contract pressures. The company's ability to maintain its profit margins, particularly in the Sensors and Effectors division, will be a key factor in its ongoing financial success. The market's positive reaction to the latest results suggests that Cohort is well-positioned to meet its future financial targets and continue its upward trajectory.
