Codan Limited reported a strong FY25 with significant revenue and profit growth, bolstered by a key U.S. acquisition and a robust outlook for FY26 driven by defense spending and gold market strength.
- 22% group revenue growth and 27% NPAT increase in FY25
- Communications segment revenue up 26%, with improved profit margins
- Minelab revenue rose 16%, driven by strong demand in Africa
- Strategic acquisition of Kägwerks expands U.S. defense footprint
- 27% increase in dividends and positive FY26 growth guidance
Strong Financial Performance Amid Global Challenges
Codan Limited has delivered another year of impressive growth in FY25, reporting a 22% increase in group revenues and a 27% rise in net profit after tax. This performance reflects the company’s ability to navigate a complex global environment while scaling its core businesses effectively. Both the Communications and Minelab divisions contributed to this success, with improved profit margins and cash generation supporting a healthy balance sheet.
Communications Segment Drives Growth and Margin Expansion
The Communications business, which includes Zetron and DTC, saw revenues climb 26% to $413.5 million, alongside a margin improvement to 27%. This growth was underpinned by a 28% increase in the order book, signaling strong demand heading into FY26. The acquisition of U.S.-based Kägwerks during the year has been pivotal, enhancing Codan’s presence in the defense sector and providing access to the Nett Warrior Program, a key U.S. military initiative. This strategic move positions Codan as a comprehensive solutions provider in defense and public safety communications.
Minelab’s Robust Performance Fueled by African Market
Minelab, Codan’s mining technology arm, recorded a 16% revenue increase to $254.8 million, with segment margins rising to 39%. The standout contributor was Minelab Africa, which posted a remarkable 64% revenue jump, benefiting from sustained high gold prices and strong artisanal mining activity. Despite challenges in some regions, such as Sudan, Minelab’s global retail and e-commerce channels helped maintain revenue levels in other markets. The company plans to launch four new detectors in FY26, expected to further bolster growth.
Strategic Investments and Capital Discipline
Codan’s strategy focuses on investing in innovation, strengthening core businesses, and pursuing disciplined acquisitions. The company invested approximately $69 million in engineering and product development, targeting future technologies like AI-enabled soldier systems and next-generation command platforms. With net debt at a modest $78.3 million and a recently renewed $250 million banking facility, Codan maintains financial flexibility to pursue further strategic acquisitions that complement its growth trajectory.
Shareholder Returns and Outlook
Reflecting confidence in its performance and prospects, Codan increased dividends per share by 27% to 28.5 cents fully franked. The share price has more than doubled over the past year, lifting market capitalization to approximately $6.1 billion. Looking ahead, Codan expects continued growth in FY26, with Communications revenue projected to rise 15-20%, supported by defense spending and new contract wins. Minelab’s strong start to FY26, particularly in Africa, suggests sustained momentum despite typical seasonal fluctuations.
Commitment to ESG and Corporate Culture
Beyond financial metrics, Codan is advancing its environmental, social, and governance (ESG) initiatives by establishing credible emissions measurement systems and supporting community programs including STEM education and indigenous scholarships. The company’s values of customer focus, trust, and high performance remain central to its culture and long-term value creation.
Bottom Line?
Codan’s blend of organic growth, strategic acquisitions, and innovation investment sets the stage for sustained expansion amid evolving global markets.
Questions in the middle?
- How will Codan’s new product launches impact revenue and margins in FY27?
- What further acquisition opportunities might Codan pursue to deepen its defense market presence?
- How will geopolitical risks and government funding delays affect near-term order flow?