Key Highlights

• Codan expects H1 FY27 Communications segment Revenue of $400 million–$410 million, compared to $221.8 million in the prior comparable period, with conflict region Demand representing approximately 50% of segment revenue.

• Group NPAT for H1 FY27 is expected to be not less than $160 million, compared to $71.2 million in the prior comparable period and $175.2 million for full-year FY26.

• The company is targeting full-year FY27 Communications revenue growth of 30%–40% compared to FY26.

Codan Ltd(ASX:CDA), the Australian technology company specialising in communications and metal detection solutions, saw its shares trading at AU$56.945 during the Trading session on 05 November 2026, down 4.79%. This movement was against the broader market trend, as the S&P/ASX 200 index (XJO) gained 2.61%, adding 230.60 points to reach 9,065.10, and the S&P/ASX 200 Information Technology index (XIJ) surged 10.09%, climbing 164.80 points to 1,797.60. The wider technology sector rally was fuelled by overnight Wall Street gains after the Democrats posted a decisive victory in the U.S. midterm elections, providing a tailwind for global Equity markets.

Communications Segment Delivers Exceptional H1 FY27 Trading Update

On 29 September 2026, Codan released an H1 FY27 trading update. The Communications segment has experienced accelerating demand, primarily for unmanned systems. Outside of conflict regions, the company expects H1 FY27 revenue growth of approximately 20% versus the prior comparable period, reflecting broad-based growth across regions and markets.

However, demand from conflict regions has been described as exceptionally elevated, with revenue from these areas expected to represent approximately 50% of Communications segment revenue in H1 FY27, compared to approximately 20% in the prior comparable period. As a result, Codan now expects H1 FY27 Communications revenue of between $400 million and $410 million, compared to $221.8 million in the pcp and $506.2 million for the full year of FY26.

The elevated level and mix of demand is expected to generate significant operating leverage, with an H1 FY27 EBIT Margin for the Communications segment in the order of 40%, compared to 26% in the pcp and 31% for full-year FY26.

Minelab and Group Outlook

The Minelab metal detection division has had a positive start to H1 FY27, driven by demand for recently launched products including the GPZ8000 and Gold Monster 2000 detectors, a favourable gold price, and continued expansion of its Rest of World business. The division's H1 FY27 revenue run-rate is now slightly above H2 FY26 levels.

Based on order visibility across Q2 FY27, subject to final product mix and shipments, Codan expects to achieve Group NPAT for H1 FY27 of not less than $160 million, compared to $71.2 million in the prior comparable period and $175.2 million for full-year FY26. For the full year, the company is targeting Communications segment revenue growth of 30%–40% compared to FY26, though it cautioned that order visibility in conflict regions is limited and it is too early to determine whether elevated demand will continue in H2 FY27.

About the Company

Codan is an Australian-listed technology company that develops communications and metal detection solutions for use in challenging environments. Its Communications segment provides tactical communications systems, including solutions for unmanned systems, while its Minelab division produces metal detection equipment for both consumer and professional markets globally.

Sector Context

The ASX technology sector posted substantial gains on 05 November 2026, with the XIJ index advancing 10.09% and the broader S&P/ASX 200 rising 2.61%. Global sentiment improved following the U.S. midterm election results. Codan's share price decline on the day bucked the broader sector trend.

Risks

A primary risk is the company's reliance on conflict region demand, which is inherently difficult to forecast beyond three months and could decline materially if geopolitical conditions shift. The concentration of approximately 50% of Communications revenue from conflict zones in H1 FY27 creates Earnings Volatility risk. Supply chain constraints remain a concern given accelerating order momentum across both Communications and Minelab. Additionally, any changes in export regulations or sanctions regimes could affect the company's ability to fulfil orders.

Catalysts on Watch

The sustainability of conflict region demand beyond H1 FY27 will be a critical determinant of full-year performance. The ongoing ramp of new Minelab product launches and the gold price trajectory are additional factors. Codan's ability to manage supply chain constraints and convert order momentum into shipped revenue will influence whether the 30%–40% full-year Communications growth target is achieved or exceeded.

What It All Means

Codan's H1 FY27 trading update highlights an exceptional period of demand in its Communications segment, with conflict region revenues driving the Business well beyond historical levels. With H1 NPAT expected to approach full-year FY26 levels, the company's near-term earnings trajectory is elevated. However, the limited visibility on H2 FY27 conflict demand and the inherent unpredictability of this revenue stream introduce uncertainty around the sustainability of current performance levels.