Codan Limited is on track to deliver over 60% growth in EBIT and NPAT for FY26, driven by stronger-than-expected Communications segment revenue and profit margins, alongside robust Minelab performance.
- Communications revenue growth hits upper 15-20% target
- Segment profit margin accelerates to 30% in FY26
- Minelab sales buoyed by gold price and new products
- EBIT and NPAT projected to exceed $235m and $170m
- Full-year results due 20 August 2026
Communications Segment Outperforms Expectations
Codan Limited (ASX:CDA) is cruising past its FY26 targets, with its Communications business delivering revenue growth at the top end of the previously guided 15-20% range. The first half saw a 19% increase over the prior corresponding period, and while the Command-and-Control arm Zetron is expected to hold steady in the second half, strong demand for software-defined radios (SDRs) from defence customers is propelling the segment forward. This momentum is underpinned by ongoing geopolitical tensions, which continue to fuel defence spending on unmanned systems.
Management’s ambition to reach a 30% segment profit margin by the end of FY27 has been brought forward, with the Communications division now expected to hit this milestone within FY26 itself; up from a 26% margin in FY25. This accelerated margin expansion reflects not only robust revenue growth but also the benefits of operating leverage.
Minelab Segment Benefits from Gold Price Tailwinds
Meanwhile, Minelab’s performance in the second half is tracking ahead of the already strong first half, supported by a favourable gold price environment and recent successful product launches. This segment’s resilience adds another layer of confidence to Codan’s overall outlook.
Profit Guidance Revised Sharply Upwards
As a consequence of the stronger Communications outlook and Minelab’s sustained momentum, Codan now expects Earnings Before Interest and Tax (EBIT) to reach approximately $235 million, with Net Profit After Tax (NPAT) around $170 million. Both figures represent an increase of over 60% compared to FY25, marking a significant leap in profitability for the technology group.
This update builds on Codan’s recent half-year results where the company reported a 19% rise in Communications revenue and a 29% increase in group revenue overall, alongside a 55% jump in net profit after tax. The trajectory from those figures to the current full-year outlook underscores a sustained acceleration in growth and profitability strong half-year performance.
Codan’s full FY26 results are scheduled for release on 20 August 2026, which will provide detailed confirmation of these projections and further segment analysis.
Bottom Line?
Codan’s accelerated margin gains and robust demand signals position FY26 as a breakout year, but investors should watch for execution risks ahead of the full-year results.
Questions in the middle?
- Will geopolitical tensions sustain demand for defence communications beyond FY26?
- Can Codan maintain its accelerated profit margin trajectory into FY27 and beyond?
- How will Minelab’s performance respond if gold prices shift materially?