Did Codan Limited use its strategy to diversify their revenues?

Team Veye | 24 Feb 2020 ASX - CDA
Did Codan Limited use its strategy to diversify their revenues?

Codan Limited (ASX: CDA)

Record First-Half Result

Australian-based technology company, Codan Limited (ASX: CDA) on 19 February 2020 announced statutory and underlying net profit after tax of $30.4 million for the half-year ended 31 December 2019.

(Chart source: TradingView)

  • Highest half-year profit in the company’s history 
  • Net profit after tax of $30.4 million, up 37% 
  • Interim dividend of 7.5 cents, fully franked 
  • Earnings per share of 16.8 cents, up 37% 
  • Communications sales increased 65% over the prior first half, with record sales being achieved by both Tactical Communications and LMR 
  • Metal Detection sales in the first half exceeded $100 million for the first time, due to continuing strong demand for gold detectors 
  • $51 million net cash position at 31 December 2019

 

The Board expects to continue its policy of paying shareholders in the order of 50% of our full-year profits as dividends, and shareholders will continue to be rewarded for the strong performance of the company. (Data Source – Company Reports)

 

Veye’s Take

The results for the first half have been outstanding across the business, with both Codan Communications and Minelab achieving record first-half results. Codan’s strong performance was driven by the continued strength of gold detector sales in Africa across multiple products, coupled with several major contracts delivered in the Communications business. The company’s strategy to diversify its revenues and broaden its addressable markets is continuing to deliver results. Codan continues to heavily invest in its businesses. The group estimates engineering investment will exceed $30 million this financial year, which will ensure that their products remain leading-edge, allowing them to further broaden their markets and drive future growth in the business. Codan had faced some minor retracements. It is likely to consolidate in this area before gaining the potential to move further up. “Buy” was given to “Codan Limited” at the price of $4.03 on1August 2019. It has already grown by more than 110% in less than seven months until now. Veye maintains a “Hold” recommendation on “Codan Limited” at the current price of $8.49

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