Codan Limited delivered exceptional financial results for FY26, with net profit after tax surging 69 percent to $175.2 million on revenue growth of 30 percent to $875.0 million. The company’s guidance for the first half of FY27 signals further momentum, with management targeting NPAT of not less than $162 million despite the first-half FY26 result being just $71.2 million. This implies a near-doubling of earnings in the comparable period, driven predominantly by elevated demand for unmanned communications systems in conflict-affected regions.
Both operating segments performed strongly in FY26. The Communications business, comprising DTC and Zetron, generated revenue of $506.2 million, up 22 percent, with segment profit reaching $156.0 million at a 31 percent margin. Within Communications, revenue from defence customers represented 58 percent of segment sales, up from 38 percent the prior year, while unmanned systems revenue more than doubled to approximately $215 million. Minelab continued its exceptional performance trajectory, posting 42 percent revenue growth to $362.0 million and 65 percent profit growth to $162.4 million, achieving a 45 percent segment margin. New product launches, including the GPZ 8000 flagship gold detector and the Vanquish 60, drove the performance alongside recovery in precious metals markets and geographic expansion.
Management attributes near-term upside to unprecedented demand for unmanned systems from conflict zones. For the first half of FY27, Codan expects Communications revenue of between $410 million and $420 million compared to $221.8 million in the prior-year period, generating estimated EBIT margins of approximately 40 percent against 26 percent in the first-half FY26 comparator. The closing order book of $380 million, up 50 percent from June 2025, provides visible revenue support, though management has acknowledged that order visibility in conflict regions is low and it remains uncertain whether the elevated demand and margins will persist through the second half of FY27.
Strategically, Codan acquired Adaptive Dynamics, a US-based electronic warfare specialist, which completed in late July 2026. The company is integrating the acquisition into its DTC business to enhance unmanned systems capabilities and competitiveness for next-generation US defence programs. Engineering investment reached approximately $78 million in FY26, representing 9 percent of group revenues, with focus areas including multi-waveform radios and AI-enabled systems. The company has also secured initial orders for its BluSDR multi-waveform radio platform into US military programs of record.
On capital allocation, the board approved revised remuneration terms to retain CEO Alf Ianniello through at least 2030, with compensation increasingly linked to relative total shareholder return and earnings-per-share growth. The company holds net cash of $35.7 million and undrawn debt facilities totalling $250 million, providing capacity for future inorganic opportunities. Codan intends to seek audit tenders in the second half of FY27 following 23 years of KPMG tenure.
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Investors should monitor several factors going forward: the trajectory of conflict-related demand post-first-half FY27, the integration of Adaptive Dynamics and its contribution to US defence programs, Minelab’s sustained momentum in precious metals markets, and the audit tender process outcomes. The company is targeting Communications segment full-year FY27 revenue growth at the upper end of the previously announced 30 percent to 40 percent range. This announcement is price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About Codan Limited (ASX: CDA)
Codan Limited is a global electronics and engineering business that designs and manufactures rugged hardware, software, and embedded systems for security, military, communications, and consumer markets. The company operates through two main divisions: Communications, which provides HF radios, encryptors, and tactical communication systems to government and military customers; and Metal Detection, which supplies metal detectors to consumer and mining sectors. Codan’s products are sold to customers in more than 150 countries across government, security, military, humanitarian, and commercial markets.
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