Codan Limited has delivered a significant upgrade to its earnings guidance, now expecting EBIT of approximately $235 million and NPAT of approximately $170 million for FY26. This represents an increase of over 60% for both metrics compared to FY25, signalling a substantial improvement in the company’s profitability trajectory. The trading update reveals that the group is performing above expectations in the second half of FY26, with both of its main business segments contributing to the enhanced outlook.
The Communications business has been the primary driver of this outperformance. The division achieved revenue growth of 19% in the first half of FY26, placing it well within the previously communicated target range of 15% to 20%. Management now expects the Communications business to achieve revenue growth at the top end of that range for the full year, sustained by strong demand across both its Command-and-Control segment (Zetron) and Direct-to-Customer operations. The company had previously targeted a 30% profit margin for the Communications segment by the end of FY27, but this goal is now expected to be achieved in FY26 itself, up from the 26% margin delivered in FY25.
The acceleration in Communications profitability is being underpinned by robust demand dynamics. The Direct-to-Customer business continues to benefit from strong orders for software-defined radios from defence customers, with ongoing geopolitical tensions supporting sustained demand for unmanned systems. The Command-and-Control portion of the business is expected to deliver second-half revenue broadly in line with the first half, providing a solid foundation for the margin expansion being achieved through operating leverage as the revenue base grows.
The Minelab segment is also performing strongly. Second-half trading to date is tracking ahead of the first half’s solid performance, supported by a favourable gold price environment and the successful release of new products. The group continues to expect second-half performance to exceed the first half, suggesting that Minelab’s momentum will extend through to the full year conclusion.
Investors will be watching for the detailed full-year results on 20 August 2026 to see the actual delivery against these upgraded expectations. The margin expansion in Communications, the pace of growth in defence-related demand, and the sustainability of Minelab’s performance under current commodity and product cycle conditions will be key areas of focus. 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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