Highlights

  • Codan closed at AUD54.49 on 6 November 2026, up 60.69% over a year.
  • H1FY27 Communications Revenue was forecast at AUD400 million to AUD410 million.
  • The company cautioned against assuming exceptional first half Demand would continue into the second half.

Codan (ASX:CDA) develops communications and metal detection equipment for government, commercial and consumer customers. Its shares finished 6 November 2026 at AUD54.49, declining 2.90% on the day while retaining a 60.69% gain over a year. The annual advance follows a September trading update that outlined substantially stronger Communications demand and a higher expected first half Earnings contribution.

A larger Communications earnings contribution

In its 29 September 2026 update, Codan forecast H1FY27 Communications revenue of AUD400 million to AUD410 million. That compares with AUD221.8 million in H1FY26 and AUD506.2 million for the whole of FY26. The forecast points to a sharp increase in activity during the first six months of the new financial year.

The company expected an H1FY27 Communications EBIT Margin of approximately 40%, compared with 26% a year earlier and 31% for FY26. A higher margin alongside stronger sales would materially increase the division’s earnings contribution. Both figures remained forward estimates at the date of the update, rather than completed half year results.

Codan forecast group H1FY27 net profit after tax of at least AUD160 million, subject to product mix and shipment timing. The comparative H1FY26 profit was AUD71.2 million, while FY26 profit was AUD175.2 million. The scale of the first half forecast makes delivery timing particularly relevant.

Order mix limits how far forecasts can be extended

Codan expected conflict region demand to represent approximately 50% of Communications revenue in H1FY27, compared with around 20% in the previous corresponding period. Outside those regions, first half revenue growth was expected to be approximately 20%, indicating that growth was not confined to conflict related orders.

However, the company stated that demand associated with conflicts was difficult to forecast more than three months ahead. It cautioned that the first half demand level and margins should not be assumed to continue during H2FY27. That limitation is central to interpreting the stronger profit forecast.

For FY27 as a whole, Communications revenue growth was targeted at 30% to 40% over FY26. Codan was also working to mitigate Supply chain constraints associated with the increased order load. Production capacity, component availability and the conversion of orders into shipments remain relevant execution considerations.

Minelab adds a different source of demand

Codan indicated that Minelab’s first half run rate was slightly above H2FY26. Demand for the GPZ 8000 and Gold Monster 2000, favourable gold prices and activity in the rest of the world supported the division’s trading expectations.

The metal detection Business therefore provides another operating contribution alongside Communications. Its customer base and product demand differ from those of communications equipment, although product supply and shipment timing still affect revenue recognition. The update did not justify extending the Communications margin forecast to the whole group.

Key Insights

Codan combines a 60.69% annual price gain with a substantially stronger H1FY27 earnings forecast. The main uncertainties are the duration of exceptional demand, the revenue mix and delivery capacity. Completed results will establish how much of the forecast uplift converts into recognised sales and profit.