The stock not only delivered good returns last year, but also indicating further growth potential. One of the best growth stocks to buy now
Codan Limited (ASX: CDA)
Codan Limited operates as a technology company with a focus on creating and producing communication and metal detection technologies for a diverse range of global industries. Their operations neatly divide into Communications and Metal Detection.
The first half of FY25 showed strong financials for Codan with revenue climbing by a solid 15% to $305.6M. This momentum flowed through to the bottom line as both EBIT and NPAT saw healthy 21% increases reaching $65.8M and $46.1M respectively.
The Communications division stood out as a key engine of this growth reporting a significant 22% surge in revenue to $187.0M and a 31% jump in segment profit. This impressive performance stemmed from robust gains in law enforcement and unmanned systems which was further amplified by the acquisition of Kägwerks. This move has notably strengthened Codan's foothold in the US military communications arena. The Metal Detection segment also played its part contributing a respectable 5% rise in revenue.
Codan is among top growth stocks focused on achieving sustainable and profitable expansion. A core element of this strategy is a commitment to investing in engineering and product development and aiming to maintain their competitive edge and fuel future growth. The company is also actively pursuing acquisitions that are particularly within the communications sector to broaden its market reach and enhance the quality of its revenue streams.
Company stands on firm financial ground boasting a robust balance sheet with a comfortable net debt-to-EBITDA ratio of less than 1. Demonstrating financial flexibility for future initiatives, Codan has also increased its existing bank facility to $200M with the potential to access an additional $150M subject to bank approval.
The company anticipates continued strong performance from its Communications segment projecting revenue growth exceeding 15% for the full year. This also includes the contributions from the Kägwerks acquisition. The Metal Detection division anticipates maintaining its present revenue. Company seems Well placed to capitalize on potential growth and provide long-term value for its investors.
Codan creates and produces essential communication technologies designed for military and public safety uses worldwide. These technologies play a crucial role in saving lives, bolstering security, and supporting peacekeeping efforts. The segment's upward trajectory is fueled by strong results in law enforcement and unmanned systems, alongside the integration of Kägwerks. Tactical Communications benefits significantly from its advanced MESH radio technology which demonstrates strong performance in challenging operational environments. Zetron is another key component of the Communications segment concentrates on critical sectors such as public safety, utilities, and transportation.
(Source: Company Announcements)
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