At a glance this $1.8mil contract seems small in comparison to the overall total revenue for Codan FYE2015 reported $143.9mil. However this contract may well be a more significant event / indicator than that. This contract relates to the Minetec division, for FYE2015 it reported total revenue of $4.8mil. As reported by the company, Minetec has gone through a restructure and refocus on its products. This looks to be the first major commercial contract after the redesign and commercialisation, 37.5% of its reported FYE2015 revenue and in a down turn in the Mining sector. I would call that a significant event and an encouraging indicator. They will be able to get some leverage out of a successful contract with this miner for other opportunities and with all the R&D expense and commercialisation behind them, should the number of contracts grow, this will make for a healthy contributor to the group which it has not been in the past.
I have seen a 12mth target price of $1.51 from Canaccord which is posted on the Codan Ltd website.
CDA Price at posting:
$1.19 Sentiment: Hold Disclosure: Held
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