Last month Codan Limited (ASX: CDA) reported its half-year results for the period ending December 31 2018. Below is a summary of the results with comparisons to the prior corresponding half year.
- Net profit after tax of $22.2m, up 40%
- EBITDA (operating income) of $38m
- Sales of $128m
- Earnings per share of 12.4 cents, up 39%
- Interim dividend of 4 cents per share (50% payout ratio)
- Special dividend of 2.5 cents per share
- Net cash position of $13m
At $3.10 the Codan share price is closing in on a record high once again on the back of a strong interim profit report delivered on February 20, with an additional investor presentation delivered today.
Pleasingly for investors both Codan's core businesses in the metal detection and communications space appear to be performing well, with metal detection sales and profits up 29% over the period.
Codan sells recreational metal detectors to amateur treasure hunters and gold detectors to professional prospectors mainly in Africa. It reports new metal detector products have lifted sales recently and it's clear that market-leading products in this space will help sales and protect profit margins.
Its communications business also sells sophisticated 'walkie-talkie' type military equipment to militias and governments in Africa or the Middle East for example, with sales up 41% over the prior corresponding period.
The stock is not especially fashionable which is a good thing for potential investors as it trades on just over 12x annualised earnings with a trailing yield of 4.8% plus full franking credits when you include special dividends.
For a business that just grew earnings per share 39% with a low payout ratio and management confident in the outlook this stock looks a worth a spot on the watch list.
