Cohort PLC on Wednesday reported a fall in its interim profit, despite a rise in revenue, due to increased administrative and finance costs.
Shares in Cohort fell 7.8% to 1,017.60 pence on Wednesday morning in London.
The Reading, England-based technology company said pretax profit fell 17% to £7.1 million for the six months ended October 31 from £8.5 million a year ago.
Profit fell largely due to increased administrative and finance costs, despite an 8.9% increase in revenue to £128.8 million from £118.2 million.
Administrative expenses rose 15% to £33.9 million from £29.4 million, while finance costs surged 78% to £1.1 million from £628,000.
Cohort attributed revenue growth to a ‘strong’ contribution from EM Solutions, which is part of its Communications and Intelligence division.
It said its lower adjusted operating profit resulted from a weaker margin mix in Sensors and Effectors, which saw more activity on low margin projects.
Order intake fell 12% to £122.3 million, compared to £139.2 million a year ago.
Cohort declared an interim dividend per share of 5.80p, up 10% from 5.25p year-on-year.
Looking ahead, the company said its full-year outlook is unchanged for revenue, adjusted operating profit and adjusted earnings per share. It said it has a ‘positive’ outlook for organic growth in the coming years due to ‘healthy’ demand in its core defence markets.
Cohort added that its current £604.5 million order book includes £145 million of revenue which will be delivered in the second half of the year.
Combined with its first-half revenue, the company said this covers 94% of consensus forecast revenue for the full year, which has upped to 96% as of early December.
‘The group delivered an increased revenue performance in the first half. As expected, adjusted operating profit was slightly short of last year’s record performance due to the margin mix in Sensors and Effectors,’ said Chair Nick Prest.
‘Solid order intake ensured we have sustained our very strong order book at a high level, whilst the increased interim dividend reflects the board’s confidence in the group’s growth prospects and continued commitment to our progressive dividend policy.’
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