Highlights

  • Codan (ASX:CDA) reported FY26 Revenue growth of 30% to $875.0 million.
  • Net profit after tax increased 69% to $175.2 million, supported by stronger margins and operating leverage.
  • Communications division revenue increased 22% to $506.2 million, with unmanned systems revenue more than doubling.
  • Codan ended FY26 with a net cash position of $35.7 million and expects around 20% revenue growth in FY27.

Codan (ASX:CDA) has strengthened its position as a diversified technology and defence-focused company, with FY26 results highlighting strong Earnings growth across its Communications and Metal Detection businesses.

The company’s latest performance reflects a significant shift in its earnings profile, with defence communications and unmanned systems becoming increasingly important contributors alongside its established Minelab metal detection business.

FY26 Performance

Codan reported revenue of $875.0 million for FY26, representing growth of 30% compared with the previous year.

Earnings before interest and tax increased 67% to $244.1 million, while net profit after tax surged 69% to $175.2 million.

Profitability improved significantly, with group EBIT Margin increasing to 27.9% and net profit margin rising to 20.0%.

The Board declared a fully franked annual Dividend of 48.5 cents per share, representing growth of 70% compared with FY25.

Defence Growth

Codan’s Communications division continued to be a major growth driver.

Revenue increased 22% to $506.2 million, while segment profit rose 45% to $156.0 million.

Defence-related activities now represent approximately 58% of Communications revenue, compared with around 38% a year earlier.

Unmanned systems revenue more than doubled to approximately $215 million, while the divisional orderbook increased around 50% to $380 million.

The growing defence contribution has strengthened the company’s earnings visibility and reduced reliance on more cyclical end markets.

Minelab Performance

The Metal Detection division delivered strong growth during FY26.

Revenue increased 42% to $362.0 million, while segment profit increased 65% to $162.4 million.

The division achieved a strong segment margin of 45.0%.

African markets remained an important contributor, with revenue increasing 60% to $184 million, supported by gold Demand and new product cycles.

While the Business continues benefiting from strong demand, sales patterns in some regions can remain influenced by Commodity prices, currency movements and market conditions.

Balance Sheet Strength

Codan strengthened its financial position during FY26.

The company finished the year with a net cash position of $35.7 million, compared with net Debt of $78.3 million a year earlier.

Codan also maintained access to an undrawn $250 million facility, providing flexibility to support growth initiatives.

The stronger Balance Sheet gives the company capacity to fund Working Capital requirements, particularly as unmanned systems demand increases, while supporting future Investment opportunities.

FY27 Outlook

Codan expects approximately 20% revenue growth in FY27.

Management highlighted strong demand for unmanned systems within the Communications division, although supply-chain capacity remains an important Factor in determining the pace of delivery.

The company continues investing in production capability to meet customer demand while maintaining operational efficiency.

Growth Drivers

Codan’s growth strategy is increasingly supported by structural trends in global defence spending and demand for advanced communications technology.

The expansion of defence communications, unmanned systems and counter-drone capabilities provides additional growth opportunities.

The company’s established Minelab Brand also continues providing exposure to global metal detection markets, including recreational and gold-detection applications.

Key Risks

Codan’s strong recent performance has increased market expectations, making execution an important factor for future valuation support.

Potential risks include supply-chain constraints, timing of defence contracts, changes in government defence spending and fluctuations in Minelab demand.

The company also remains exposed to regional risks within some metal detection markets, including geopolitical and currency-related factors.

Outlook

Codan enters FY27 with stronger earnings momentum, a larger defence presence and a strengthened financial position.

The company’s ability to deliver against revenue growth expectations, expand its orderbook and manage production capacity will be key factors shaping future performance.

Investors will continue monitoring defence contract wins, unmanned systems delivery, Minelab demand trends and capital management opportunities.