Codan (ASX: CDA) – FY26 Full Year Results Investor Presentation

Codan Limited delivered a standout result for the financial year ended 30 June 2026, with profit after tax jumping 69 percent to $175.2 million and earnings before interest and tax surging 67 percent to $244.1 million. The 30 percent increase in revenue to $875 million was underpinned by strong organic growth across both the Communications and Metal Detection divisions, with management noting that the results slightly exceeded the top end of guidance provided in April. This combination of topline acceleration and margin expansion shows both operational execution and favorable market tailwinds across the company’s key verticals.

The Communications segment, which represents 58 percent of group revenue, generated $506.2 million in sales and $156.0 million in profit, reflecting segment margins of 31 percent. Defence revenues, which accounted for 58 percent of Communications revenue in FY26 compared with 38 percent in the prior year, proved the primary driver of growth, with demand for unmanned systems more than doubling revenue in that category. The segment’s orderbook stood at $380 million at year-end, up 50 percent, with $255 million scheduled for delivery in FY27. This forward visibility provides a foundation for continued Communications growth, though management acknowledged that full year FY27 revenue growth is expected to be in the order of 20 percent rather than maintaining the elevated FY26 growth rate.

Metal Detection produced exceptional returns with revenue of $362 million, up 42 percent year on year, and segment profit of $162.4 million, up 65 percent, translating to segment margins of 45 percent. Africa drove this outperformance with revenue of $184 million, up 60 percent, supported by strong uptake of the newly launched GPZ8000 flagship gold detector and the Gold Monster 2000. Management noted that early FY27 trading has been positive, with both Africa and the rest of world regions tracking broadly in line with H2 FY26 run-rates of approximately $32 million per month.

From a balance sheet perspective, Codan moved from net debt of $78.3 million at 30 June 2025 to net cash of $35.7 million at 30 June 2026. The company maintains $250 million in undrawn debt capacity, subject to bank approval, alongside an additional $150 million facility, providing substantial headroom for acquisitions or capital deployment. Management completed the Adaptive Dynamics acquisition in July for approximately $21 million upfront and contingent consideration, intended to strengthen positioning for next-generation US defence programs.

Management increased the dividend by 70 percent to 48.5 cents per share, fully franked. The company maintained its engineering investment at approximately 9 percent of revenues, or $78 million, split evenly between the two segments. Going forward, investors should monitor execution on the strategy of building a stronger Codan including integration of Adaptive Dynamics, continued expansion of the SALUS platform at Zetron, and sustained momentum in unmanned systems and gold detection markets as key indicators of value creation.

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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