Codan (ASX: CDA) Posts Strong H1 FY25 Results as Communications Business Leads the Charge

Codan Limited (ASX: CDA) has delivered another standout half-year performance, with revenue jumping 15% to $305.6 million, driven by the continued strength of its Communications business. EBIT and NPAT both surged 21%, reinforcing the company’s sustained growth trajectory over the past two years.

Investors will be pleased to see a fully franked interim dividend of 12.5 cents per share, a 19% increase from the prior year.

Key Financial Highlights

  • Revenue: $305.6M (+15% YoY)
  • EBIT: $65.8M (+21% YoY)
  • NPAT: $46.1M (+21% YoY)
  • EPS: 25.4 cents (+21% YoY)
  • Interim dividend: 12.5 cents per share (fully franked, +19% YoY)
  • Net debt: $124.1M (up by $48.7M, primarily due to acquisitions and working capital needs)

Communications Business Drives Growth

Codan’s Communications segment was the star performer, with revenue up 22% to $187M, well above the company’s 10–15% growth target. Profit in this segment jumped 31%, with profit margins improving to 27% from 25% YoY.

  • Order book swelled to $247M (+35% YoY), indicating continued demand for Codan’s mission-critical communications solutions.
  • Tactical Communications saw strong demand from law enforcement and unmanned systems, leveraging its MESH radio technology for contested environments.
  • Zetron, which provides critical communications for public safety, utilities, and transportation, continued its steady growth.
  • The acquisition of Kägwerks (a specialist in tactical soldier-worn communications) further strengthens Codan’s position in the US military market, with projected $49M–$57M revenue and $8M–$11M EBITDA in its first year.

With further growth expected from Kägwerks, Codan is well-positioned to exceed its 15%+ Communications revenue growth target for FY25.

Metal Detection Steady, Africa Shows Promise

Codan’s Minelab metal detection business posted 5% revenue growth, reaching $115M. Key highlights included:

  • Minelab Africa outperformed expectations, delivering $45M revenue, despite continued instability in Sudan.
  • Rest of World (RoW) revenue remained resilient despite rising costs of living and US political uncertainties ahead of elections.
  • Countermine (humanitarian demining solutions) had a weaker half due to the absence of a large order from H1 FY24, but Codan remains committed to advancing its leading-edge demining technology.

Debt, Cash Flow & Strategic Expansion

Codan’s net debt increased to $124.1M, primarily due to:

  • $36.1M acquisition of Kägwerks
  • $26.2M in working capital investment to support Communications growth

The company expanded its bank facility to $200M (with potential to increase by another $150M), ensuring financial flexibility for future acquisitions—with a particular focus on high-margin, recurring revenue businesses in the Communications sector.

Outlook: Positioned for Long-Term Growth

CEO Alf Ianniello remains bullish on Codan’s prospects:

“We have delivered sustainable growth over the last four halves, highlighting our strong operational execution. Our strategy positions us well to capitalise on new opportunities and drive further profitable growth.”

With a record order book, strong Communications momentum, and strategic acquisitions, Codan is well-positioned for another strong full-year performance. Investors will be watching closely to see if the company continues exceeding its targets in H2 FY25.