Meta Category: Technology

Key Highlights

  • Codan runs two very different businesses — communications equipment and metal detection — that together drove a 69% profit surge.
  • Revenue rose 30% to A$875.0 million and net profit reached A$175.2 million, with strong margins in both divisions.
  • Defence Demand lifted Communications, while its Minelab Brand dominates consumer and artisanal-mining metal detectors.
  • The FY2026 result, for the year ended 30 June 2026, was exceptional, with both divisions delivering strong growth and profit.

Codan (ASX:CDA) is an Australian technology company and a member of the S&P/ASX 200, built around two quite distinct businesses: communications equipment — including tactical radios and, increasingly, unmanned systems used by defence and security customers — and metal detection, where its Minelab brand is a global leader. How communications equipment and metal detection shape Codan is the key to the company: these two very different divisions, each with strong products and high margins, together drive its Earnings and give it Diversification across defence, security and consumer markets.

The FY2026 result, for the year ended 30 June 2026, was exceptional, with both divisions delivering strong growth and profit surging.

A standout result

Codan reported total Revenue of A$875.0 million, up 30%, and net profit after tax of A$175.2 million, up 69%. The profit Margin expanded sharply to 20.0% of revenue, from 15.3%. The board lifted the fully Franked Dividend 70% to 48.5 cents a share, reflecting the strength of the result and the company's cash generation.

Both divisions contributed strongly. Communications delivered revenue of A$506.2 million, up 22%, with profit up 45% to A$156.0 million at a 31% margin, while Metal Detection generated revenue of A$362.0 million, up 42%, with profit up 65% to A$162.4 million at a 45% margin. The balance between the two businesses, each highly profitable, is central to Codan's appeal.

Communications: riding defence demand

Codan's Communications division makes high-frequency and tactical radios and, increasingly, unmanned and counter-drone systems, used by military, security and humanitarian customers who need reliable communications in demanding environments. In FY2026 this Business grew strongly, with defence customers accounting for 58% of Communications revenue, up from 38% the previous year, and unmanned systems contributing around A$215 million as that revenue more than doubled.

The growth reflects rising global defence spending and demand for the specialised communications and unmanned technologies Codan provides. Defence is an attractive market: it values reliable, proven equipment, is less sensitive to economic cycles, and can provide substantial, recurring demand. Codan's move deeper into defence and unmanned systems, through Investment and acquisitions, has transformed the Communications division into a major growth engine, tied to the broad increase in security and defence budgets around the world.

Metal Detection: the Minelab franchise

Codan's other engine is metal detection, built around its Minelab brand, a global leader in detectors used both by consumers — hobbyists searching for coins, relics and gold — and, importantly, by artisanal gold miners in Africa and elsewhere who use detectors to find gold. In FY2026 this business delivered revenue of A$362.0 million, up 42%, at an outstanding 45% profit margin.

Minelab's strength lies in its technology and brand: its detectors are regarded as among the best in the world, commanding premium prices and loyal customers. Demand from artisanal gold miners is linked to the gold price — when gold is high, more people search for it, driving detector sales — which helped the strong FY2026 result. The consumer market for detecting as a hobby provides additional demand. The high margins reflect Minelab's technological Leadership and brand strength, making metal detection a highly profitable business that complements Communications.

The risks

Codan's two businesses carry different risks. Metal Detection is linked to the gold price through artisanal-mining demand, so a fall in gold could reduce detector sales, and the consumer market can be affected by economic conditions. Communications depends on defence and security spending, which, while currently strong, can be affected by government budgets and the timing of contracts and can be lumpy.

The company operates in specialised markets where competition and technological change require continual investment in Research and Development to maintain its edge. Acquisitions, part of its growth, carry integration and execution risk. As a manufacturer selling globally, Codan is exposed to currency movements, supply-chain and input costs, and, for its defence products, export controls and geopolitical factors. Its strong FY2026 result, boosted by high gold prices and rising defence demand, may be hard to repeat if those conditions normalise.