Codan combines record 69% NPAT growth, defence-led structural demand and a fortified balance sheet with an elevated 41.8x P/E that leaves execution and valuation risks finely balanced.
Overview
Codan is a globally diversified technology group selling high-performance communications, connection, and metal-detection solutions in more than 150 countries through Communications and Metal Detection. FY26 revenue rose 30% to **A$875.0M**, with Communications contributing A$506.2M and Metal Detection A$362.0M. The growth mix was strategically important: unmanned Communications systems more than doubled to approximately A$215M, while Minelab Africa revenue increased 60% to A$184M and Rest-of-World Metal Detection grew 32%. Profitability accelerated sharply, with EBIT up 67% to A$244.1M, EBIT margin up 620 basis points to 27.9%, EBITDA up 57.3% to A$288.9M, and NPAT up 69% to A$175.2M. The company exceeded both internal guidance and consensus estimates, ended with A$35.7M net cash, and lifted the fully franked dividend 70% to 48.5 cents per share. **The core valuation issue is that the shares trade around 41.8x trailing P/E, 10.19x sales, and 31.12x EV/EBITDA.** FY27 guidance for approximately 20% revenue growth, the A$380M Communications order book, and Adaptive Dynamics provide catalysts, but the stock’s 87.1% one-year gain leaves limited room for execution disappointment.