Codan have released their half yearly results to the market

CODAN H1 FY24 RESULTS

H1 FY24 HIGHLIGHTS:

·        Group revenue of $265.9 million, up 26% versus prior corresponding period (“pcp”)

·        Net profit after tax of $38.1 million, up 24% versus pcp

·        Performance by Communications businesses in line with 10 to 15% revenue growth target range:

·        Communications revenues of $153.6 million, up 12.5% versus pcp, segment profit $37.8 million, up 9% versus pcp

·        Communications orderbook of $183 million, +12% versus 30 June 2023

·        Metal detection revenues up 49% versus pcp, with all divisions contributing to this growth

·        Net debt of $82.5 million at 31 December 2023, having funded $30.3 million for the Eagle and Wave Central acquisitions in the period

·        Earnings per share of 20.9 cents, up 22% versus pcp

·        Interim dividend of 10.5 cents, fully franked

The HY23 figures are quite an increase on the FY23 figures with revenue and net profit up around 25% with Minelab and the Africa operations improving quite a bit.

My current valuation of Codan is as follows:

Current assumed FYNPAT of $80 Million ($38.1m + $38.1m x 10%)

This is a growth stock and they have delivered significant revenue and earnings growth for a number of years apart from recent reduction in group revenue/ profits due to ongoing disruptions in Minelab’s African market but with this market now coming back and with recent acquisitions and strong R&D believe this will continue to improve over the next year or so.

There are around 181,307,400 SOI,

So With a NPAT of $80m gives us a NPAT per share of $0.44124

Now that there is growth in the company again I have revised my PE to 20,

Assuming a PE of 20 gives a valuation of $1.60 Billion or $8.82 per share

My revised valuation is $8.82 per share