Codan Limited has reported a robust half-year performance for FY26, with revenue climbing 29% and net profit after tax jumping 55%, underpinned by strong demand in communications and metal detection sectors. The company also announced a 56% increase in its interim dividend, signalling confidence in sustained growth.
- Group revenue rises 29% to $393.5 million
- Net profit after tax increases 55% to $71.2 million
- Communications segment revenue up 19%, metal detection up 46%
- Interim fully franked dividend raised 56% to 19.5 cents per share
- Strong balance sheet with net debt of $88.2 million and undrawn facilities
Strong Half-Year Growth Across Core Segments
Codan Limited has delivered a compelling financial performance for the half year ended 31 December 2025, with total revenue reaching $393.5 million, a 29% increase over the previous corresponding period. This growth was driven by robust demand in both its Communications and Metal Detection divisions, reflecting Codan’s diversified technology portfolio and strategic execution.
The Communications segment posted revenue of $221.8 million, up 19%, supported by strong defence and unmanned systems applications. Notably, revenue from unmanned systems surged 68%, highlighting the expanding market for these technologies amid ongoing geopolitical tensions. Meanwhile, the Metal Detection segment experienced exceptional growth, with revenue climbing 46% to $168 million, buoyed by heightened demand for gold detection equipment in West Africa and favourable gold prices globally.
Profitability and Margins Reflect Operational Leverage
Codan’s net profit after tax rose 55% to $71.2 million, underscoring strong operational leverage. Earnings before interest and tax (EBIT) increased 52% to $99.8 million. The Metal Detection segment’s profit margin notably improved to 45%, up from 36% in the prior period, reflecting a higher proportion of gold detector sales. The Communications segment maintained solid profitability despite some margin pressure from challenging trading conditions in the Zetron business and the full-period inclusion of the Kägwerks acquisition.
Codan’s orderbook in Communications expanded 19% to $294 million, signalling sustained demand and a healthy pipeline. The company continues to invest in product innovation, including next-generation software-defined radios and enhanced command and control platforms, positioning it well for future growth.
Dividend and Balance Sheet Strength
Reflecting confidence in its outlook, Codan declared a fully franked interim dividend of 19.5 cents per share, a 56% increase from the prior period. The company’s balance sheet remains robust, with net debt of $88.2 million and undrawn banking facilities of $140 million, providing financial flexibility for ongoing investment and potential acquisitions aligned with its strategic roadmap.
Codan’s management highlighted that second-half trading conditions are expected to be at least in line with the first half, supported by favourable market dynamics in both segments and the full contribution from recent product launches.
Outlook and Strategic Positioning
With elevated defence spending and geopolitical uncertainties driving demand for unmanned systems, and strong gold market conditions underpinning metal detection sales, Codan is well positioned to sustain its growth trajectory. The company’s disciplined capital allocation and ongoing investment in technology leadership reinforce its strategy to build a resilient and diversified earnings base.
Investors will be watching closely how Codan navigates evolving market conditions and leverages its balance sheet to capitalize on inorganic growth opportunities in the coming months.
Bottom Line?
Codan’s strong half-year results and dividend hike underscore its growth momentum, but market and margin dynamics warrant close monitoring ahead.
Questions in the middle?
- How will Codan manage margin pressures in the Communications segment amid challenging trading conditions?
- What inorganic growth opportunities might Codan pursue with its strong balance sheet?
- How sustainable is the surge in demand for metal detection products, especially in gold markets?