Key Highlights

• Codan reported FY26 Revenue of AUD875 mn and NPAT of AUD175.2 mn.

• Communications revenue reached AUD506.2 mn, while the order book increased to AUD380 mn.

• Metal Detection revenue rose to AUD362 mn, supported by Demand across key regions.

• FY27 execution depends on Backlog conversion, electronics supply, defence demand, gold-related activity and Acquisition integration.

Codan (ASX:CDA) enters FY27 after reporting higher FY26 revenue and Earnings across its Communications and Metal Detection segments. The Adelaide-based technology group develops communications systems for defence and public safety customers and metal-detection products used in gold prospecting, recreation and humanitarian applications. Its outlook now depends on converting a larger communications order book while maintaining demand across Minelab’s international markets.

FY26 result broadens the operating base

Codan reported group revenue of AUD875 mn, NPAT of AUD175.2 mn and EBITDA of AUD288.9 mn for FY26. Communications revenue increased to AUD506.2 mn and the segment’s order book reached AUD380 mn. Metal Detection revenue rose to AUD362 mn. The result indicates that growth was not confined to one division, although the drivers and risk profile differ between government-focused communications work and consumer or small-scale Mining demand for detectors.

The Communications segment includes tactical, public-safety and related systems sold into procurement programs that can involve long sales cycles, tender requirements and delivery milestones. A larger backlog provides visibility, but revenue recognition depends on manufacturing, customer acceptance and scheduled delivery. Minelab has a different demand pattern, with activity influenced by product cycles, distributor inventories, gold prospecting Economics and regional purchasing power.

FY27 outlook focuses on communications growth

Codan targets approximately 20% FY27 revenue growth in Communications. The first half is expected to exceed the prior corresponding period, supported by demand for unmanned systems, subject to supply-chain constraints. Minelab’s Africa and rest-of-world businesses are tracking broadly in line with the monthly revenue run-rate recorded in the second half of FY26.

Backlog conversion will be an important measure because orders do not automatically become revenue within a fixed period. Component availability, production capacity, export requirements and customer schedules can shift delivery timing. Codan must also manage Working Capital as inventory and receivables expand alongside activity.

Industry trends and market context

Defence and public-safety communications markets are being influenced by higher spending on resilient networks, interoperability, electronic systems and unmanned platforms. Buyers generally require secure equipment, field reliability and long support periods, creating opportunities for specialised suppliers but also demanding certification and sustained research expenditure. Metal detection remains linked to recreational demand, artisanal gold activity and Commodity economics, particularly in Africa and other emerging markets.

Investment risks and challenges

Codan is exposed to electronics Supply constraints, procurement timing, customer concentration and changes in global defence budgets. Minelab demand can fluctuate with gold prices, distributor stock and economic conditions. Foreign exchange affects international revenue and costs. Acquisitions in Communications also create integration, retention and product-roadmap risks, while rapid growth can increase working-capital requirements.

Bullish and bearish perspectives

The constructive case rests on a larger communications order book, demand for unmanned and public-safety systems and continued contribution from Minelab. The cautious case is that government orders can be delayed, component shortages can move revenue between periods and metal-detection demand can normalise after periods of rapid growth. Acquisition execution also remains important.

Codan’s FY27 progress will be visible through Communications revenue, backlog conversion, segment margins and Minelab’s regional run-rate. Delivery discipline and supply availability will determine whether the FY26 expansion translates into a sustainable operating base.