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16 Dec 10. Cohort plc, the independent technology group, today announces unaudited interim results for the half year to 31 October 2010. Highlights include:
* Revenue decreased by 15% to £32.7m.
* Adjusted* operating profit decreased by 19% to £2.1m.
* MASS continues to perform strongly.
* SCS has returned to profitability after restructuring the business during the latter half of 2009/10.
* SEA performance was weak and action is underway to address its performance.
* Strong order book of £107.0m, underpinning £27.5m of second half revenue.
* Cash inflow from operating activities of £4.3m and net funds increased to £5.5m.
* Adjusted operating profit is operating profit excluding amortisation of other intangible assets and exceptional items.
Commenting on the results, Nick Prest, Chairman of Cohort, said:
“Cohort’s overall profit has been in line with the Board’s expectations for the first half, although performance at its subsidiaries has been mixed. Profit at SCS has shown a sharp improvement compared to the first half of 2009/10 and MASS has performed ahead of expectations. SEA’s performance has been poor and action is being taken to redress this.
“As this will take some months, the Board now expects that the Group’s trading profit before exceptional costs for the full year will be below previous expectations, though will still show an improvement on the 2009/10 result. “The Group’s operating companies have strong capabilities and market positions. By focusing on these and aligning resources accordingly we expect Group profitability to return to a more satisfactory level, notwithstanding the uncertainties in the defence trading environment.”
BATTLESPACE Comment: This is not a particularly sparkling set of figures from Cohort and comes at a time when sources suggest that the MoD has put a complete freeze on consultants. Cohort had been hoping the alternative would happen and that more work would be farmed out. Sources also suggest that the recent Team Excalibur Shepherd EW downselect with Logica leading may have been delayed. A Cohort source told BATTLESPACE that, “Actually, they are better than they first appear. This time last year there was a problem with the figures: some new software had not been working properly and the sums were much rosier than they should have been. This had to be corrected (rather embarrassing, as you can imagine) and so today’s figures don’t look so favourable. Had the ones published last December been correct, today’s would have been a cause for celebration”. Convenient to blame software for bad figures! BATTLESPACE understood that the downturn may have been due to a change in accounting practices at SEA following the departure of M.D. Rick Bounsall. Nick Prest also has a large share in the struggling Shephard Group, which is believed to be suffering from the defence downturn with the cancellation of a number of events this year. Perhaps Mr. Prest has spread himself too thin and should concentrate his efforts in one area? Cohort is a share to be avoided for the moment.

17 Dec 10. Defence contractor and consultant Cohort just about made it into profitability after a difficult half dominated by the fall-out from the coalition government’s strategic defence and security review. Even so, management still had to issue a warning on full-year profits. A high proportion of Cohort’s sales are to the Ministry of Defence (MoD), but while the review was positive for some parts of the business – the company supplies the communications systems for the Astute class submarine, for example – there are a number of risks to future contract awards, which management says are currently “hard to quantify.” The best-performing division was the MASS subsidiary, which supplies defence electronics to the MoD – it posted a 7 per cent rise in sales, although profits were flat at £1.9m. But the lack of demand for defence consultants saw sales crash by 32 per cent to £9.5 at man-power subsidiary SCS, although man

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