This morning Codan Limited (ASX: CDA) released its results for the financial year ending June 30, 2019. Below is a summary of the results with comparisons to the prior year.
- Sales of $271 million, versus $230m
- Metal detector sales at $182m, versus $164m
- EBITDA (operating income) of $79m, versus $70.4m
- Net profit after tax of $26m
- Adjusted net profit of $46m, versus $40m
- Earnings per share of 25c
- 5 cent final dividend
- Plus a 2.5 cent final special dividend
- Total FY19 dividends 14cps on 55% payout ratio, versus 12.5cps in FY18
- Return on equity 23%
- No debt and $37m cash on hand
This is another impressive year from the South Australia-based metal and mine-clearing detector business that has now delivered three years of consistent growth after a rocky period up to FY 2017.
Its main business is the manufacture and sale of gold or metal detectors used on a recreational basis by amateur treasure hunters, or small-scale 'artisanal' miners in Africa, Latin America and The Asia Pacific regions.
Its recreational metal detector business grew product sales 40% as amateur archaeologists, adventurers, or beach comber types snap up some of its latest products.
The land mine detectors are normally sold to developing-world militaries or mercenaries that operate in war torn areas where land mines are an unfortunate legacy of conflict.
Codan also sold $78 million of military communication equipment, which is encrypted walkie-talkie type equipment commonly used by soldiers on field operations.
Overall, Codan ticks many boxes for small-cap investors with a reasonable track record of growth, strong balance sheet, 23% return on equity, handy dividend yield, and ok valuation at 19x FY 2019's earnings at $4.76 per share.
