Codan has set a first-half FY27 NPAT floor of $162 million after delivering record FY26 results, while targeting Communications revenue growth at the upper end of its 30% to 40% range. The company is benefiting from exceptional demand for unmanned systems, although visibility in conflict markets remains limited beyond the near term.
- First-half FY27 NPAT expected to reach at least $162 million
- Communications revenue forecast at $410 million to $420 million
- FY26 revenue rose 30% to $875.0 million
- Communications order book climbed 50% to $380 million
- CEO Alf Ianniello intends to sell up to 43,000 shares
Codan sets a $162 million first-half profit floor
Codan Limited (ASX:CDA) has entered FY27 with a profit target that would put the first half close to the group’s entire FY26 result. At its annual meeting, the company said it currently expects first-half FY27 NPAT of not less than $162 million, compared with $71.2 million in the first half of FY26 and $175.2 million for the full year. The expectation remains subject to final product mix and shipments.
The update formalises the stronger trading picture already signalled in placeholder but, in the permitted cross-link format, the relevant earlier announcement is the September trading update, which reported first-half NPAT of at least $160 million and Communications revenue of $400 million to $410 million. Codan has now lifted the Communications revenue range to $410 million to $420 million, with the segment’s first-half EBIT margin expected to be about 40%, against 26% a year earlier.
Unmanned systems drive Communications acceleration
The engine is demand for unmanned radio systems in conflict regions. Codan said Communications revenue from defence customers rose to 58% of the segment total in FY26, from 38% in FY25, while DTC’s revenue from the high-growth unmanned sector more than doubled to approximately $215 million. The segment closed FY26 with a $380 million order book, up 50% from 30 June 2025, and the company said demand remained elevated through the first three months of FY27.
That momentum sits alongside the FY26 record results, when group revenue increased 30% to $875.0 million and NPAT rose 69% to $175.2 million. Communications revenue grew 22% to $506.2 million, while Minelab revenue climbed 42% to $362.0 million, helped by new GPZ 8000 and Gold Monster 2000 detectors and stronger sales across Africa and the rest of the world.
FY27 growth target depends on conflict-market visibility
Codan is targeting full-year Communications revenue growth at the upper end of its previously announced 30% to 40% range. The company said demand may remain strong into the second half, but order visibility in conflict regions is low, making it too early to determine whether the first-half sales pace and approximately 40% margin can persist. Minelab’s first-half revenue run-rate is tracking slightly above the second half of FY26, supported by the recently launched detectors, a favourable gold price and continued expansion outside its home markets.
Adaptive Dynamics adds electronic warfare capability
Codan completed its acquisition of US-based Adaptive Dynamics at the end of July and is integrating its anti-jamming and interference-mitigation technology into DTC’s unmanned product suite. The deal is intended to strengthen DTC’s technical capabilities in the US and its ability to compete for next-generation US and allied defence programs. It follows the Adaptive Dynamics acquisition, which was reported as a transaction focused on electronic warfare and resilient communications.
Capital flexibility and CEO share sale
Codan ended FY26 with $35.7 million in net cash, an undrawn $250 million debt facility and a further $150 million of accordion capacity subject to bank approval. The board said that funding flexibility would support potential Communications acquisitions where it sees compelling returns. Separately, CEO Alf Ianniello intends to sell up to approximately 43,000 shares by the end of the calendar year to meet personal tax and other financial commitments. The board has approved the proposed sale in principle, and Ianniello is expected to retain about 177,000 ordinary shares plus performance rights.
Codan’s FY26 figures were accompanied by a 70% increase in fully franked dividends to 48.5 cents per share, while its share price rose from $20.11 at 30 June 2025 to $62.69 on 19 October 2026. The company has also begun reshaping its longer-term strategy around organic investment, product innovation, geographic expansion and selective Communications acquisitions. The immediate test is whether the unusually strong first-half demand can be converted into durable second-half orders before the company’s low visibility in conflict markets becomes decisive.
Bottom Line?
Codan’s first-half target is substantial, but the valuation case now depends heavily on how much of the conflict-driven Communications surge survives beyond the near-term order cycle.
Questions in the middle?
- Can the approximately 40% Communications EBIT margin hold when first-half demand normalises?
- How durable will unmanned-systems orders be in conflict regions where visibility is currently low?
- Will Adaptive Dynamics generate measurable commercial benefits as its electronic warfare technology is integrated into DTC?