Codan Limited

 
CDA Details
Delivered guidance for 1H FY 17:  Codan Limited (ASX: CDA) is expecting the underlying Net Profit After Tax (NPAT) to be in the range of $20 million to $22 million in the first half of FY 17 and forecasts full year FY17 underlying NPAT to be in the range of $30 million to $32 million, a growth of 42% on FY16. CDA has assumed that African demand for GPZ 7000®detector will return to more normal levels in the second half of FY 17. The metal detection historical sales have been strong in the range of $70 million to $100 million for the last three years. However, the group finds it difficult to forecast the African demand which has been otherwise considered encouraging. For group’s Radio Communications segment, LMR Cascade development has been on track for FY18 release which is indicative of growth over the medium term. Moreover, CDA has delivered large radio contract in the first quarter of FY 17. Thus, Radio Communications delivered its best profit result for seven years in FY16. However, the group says it might be difficult to repeat that result in FY17. The Minetec tracking solutions business is still trying to have continued gain in customer acceptance but expects to deliver only a small profit in FY17. Further, no sales is expected from Codan Defence Electronics in FY17. Otherwise, sales for the four months to 31 October 2016, grew 76% to $74 million. The group is debt-free. 

Revenue by Business Unit (Source: Company Reports)
 
Stock Performance: CDA stock has risen 185.3% this year to date as on 13 December 2016 and is now trading at a higher P/E level. We give an “Expensive” recommendation on the stock at the current price of – $ 1.94

 
CDA Daily Chart (Source: Thomson Reuters)

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