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Investing.com -- Cohort confirmed its fiscal 2026 (FY26) expectations at its AGM trading update, with the company reiterating sales guidance of £291 million, up 7.7% year on year, and adjusted EBIT of £35 million, an increase of 28%.
Adjusted EBIT for the first half, however, is expected to be softer year-over-year.
Shares in Cohort fell 3.5% in early London trading.
RBC Capital Markets noted that these forecasts are in line with consensus. The broker projects a 2% like-for-like (LFL) decline in FY26, driven by the wind-down of one-off short-cycle business at the MCL subsidiary, which is falling from £50 million last year to below £30 million.
“AGM trading indicates this has transpired as anticipated. Adjusting for MCL, we forecast +5% yoy LFL in FY26e,” RBC analyst Ben Pfannes-Varrow added.
Cohort’s first-half (H1) adjusted EBIT is expected to be slightly lower than last year due to tough comparatives, but RBC highlighted that this mirrors Cohort’s usual seasonality, with a heavier weighting in the second half.
Pfannes-Varrow pointed out that H1 performance includes a first contribution from EM Solutions, while weaker mixes at ELAC and SEA’s transport disposal will offset some of that benefit.
If EBIT is down about 11% in the first half, the implied split is 25%/75% across H1 and H2, in line with the five-year average, the analyst said.
Cohort’s order book stood at £590 million, down 4% year on year, but still covering almost 90% of fiscal 2026 revenue expectations.
Pfannes-Varrow said there is scope for further improvement at the half-year results in December, with potential “significant orders” cited by the company that could move the needle later this year, including opportunities with the Portuguese Navy, export demand for SEA’s Ancilia, and counter-drone systems at Chess.
Cohort cautioned on a temporary increase in net debt to around £30 million in the first half, mainly due to working capital timing and capital expenditure for ELAC’s new facility. Still, the group maintains a fiscal 2026 year-end target of net cash of £10–15 million.
Pfannes-Varrow said that Cohort’s “M&A firepower of £58m in FY26e rising to £104m by FY28e (assuming 1x leverage), remains core to our investment case”.
RBC kept its Outperform rating on Cohort with a price target of 1,740p.