Growth, Cash, Dividends

Codan’s latest result justifies the 10% move and suggests the market is only starting to re-rate:

• Broad-based growth – Group sales +13% to $601m. Minelab +19% (African demand remains robust), while Communications grew +6% with momentum in defence and tactical comms contracts. This dual-engine profile reduces reliance on any single market.

• Earnings power – NPAT jumped +27% to $117m, EPS up to 65.6c. Importantly, EBITDA margins stayed north of 30%, highlighting both pricing power and disciplined cost management.

• Balance sheet resilience – $153m operating cashflow, $134m net cash, and zero debt. CDA is in the enviable position of being able to fund growth organically while still rewarding shareholders.

• Capital returns – Dividend lifted to 63c fully franked (vs 49c last year), equating to a ~6% yield even after the share price rally. Unlike many peers, this payout is fully underpinned by real free cashflow.

• Forward outlook – Management signalled confidence in FY26, with ongoing defence spend and sustained demand for detection as structural tailwinds. Few mid-caps combine genuine growth, strong cash returns, and a fortress balance sheet.

CDA is emerging as a rare mid-cap that delivers both growth and income. With dual growth engines, a rock-solid balance sheet, and fully funded dividends, the company is positioned for continued re-rating as investors recognise its quality.

Not advice – DYOR.