Cohort - Defence prioritisation to strengthen demand

Cohort’s position as a growing international defence company is being increasingly recognised as the sector gains relevance for governments and investors alike. The Russian invasion of Ukraine is stimulating short-term operational requirements but, more importantly, has initiated a return to higher long-term defence spending commitments from NATO members. Cohort’s positioning in the training and supply of critical capabilities to its customers should benefit from the enhanced environment. FY22 was challenging for EID and Chess, but the rest of the business developed positively and prospects for a return to growth this year are good. Despite the recent share price gains, these prospects are not reflected in the rating, and our updated discounted cash flow (DCF) value of 684p/share indicates significant potential.