Cohort PLC (CHRT.L) 2024年年度報告「LSE」.pdf

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1、Applying advanced technology to protect and secureAnnual Report and Accounts 2024WHO WE AREREAD MORE ABOUT OUR STRATEGY ON PAGES 13 TO 16Strategic report1 Who we are2 Highlights3 At a glance4 Investment case5 Chairmans statement7 Chief Executive Officers report9 Our markets10 Geographic analysis11 B

2、usiness model13 Strategy15 Strategy in action17 Key performance indicators19 Operating review22 Financial review28 Stakeholder engagement32 Section 172(1)statement 34 Sustainability42 Climate-related financial disclosures49 Risk management and principal risksGovernance56 Board of Directors and Compa

3、ny Secretary58 Corporate governance report62 Audit Committee report64 Nomination Committee report65 Remuneration Committee report73 Directors report75 Statement of Directors responsibilitiesFinancial statements76 Independent auditors report82 Consolidated income statement83 Consolidated statement of

4、 comprehensive income84 Consolidated statement of changes in equity85 Company statement of changes in equity86 Consolidated and Company statement of financial position87 Consolidated cash flow statement88 Notes to the financial statements117 Accounting policies124 Notes to the accounting policies125

5、 Five-year record126 Glossary of terms127 Shareholder information,financial calendar and advisersOUR STRATEGYOrganic growthMaintaining confidenceAcquisitionOUR SUSTAINABILITY PILLARSEnvironmentalSocialGovernancePeopleCohort is a group of like-minded technology companies operating in the defence and

6、security marketsOUR PURPOSECohort delivers trusted and valued technology that protects us all.Through innovation,organic business growth and acquisitions,we provide real value to our people,customers and shareholders.We provide an entrepreneurial culture enabling our businesses to build solutions fo

7、r the future of security and defence.We operate with deep-rooted knowledge and foster trusted relations with our customers and shareholders alike.Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 1HIGHLIGHTSHow we have performedOperational highlightsFinancial h

8、ighlightsADJUSTED OPERATING PROFIT(M)121.1m22 15.521 18.620 18.224 21.123 19.1STATUTORY PROFIT BEFORE TAX(M)119.8m22 10.221 7.120 10.024 19.823 13.9ORDER INTAKE(M)392.1m22 186.421 180.320 124.424 392.123 220.9Order intake of 392.1m(2023:220.9m),including the 135m Royal Navy contract awarded to SEA i

9、n March 2024.Sensors and Effectors saw robust growth,with Chess and SEA delivering improved performances.Communications and Intelligence reported a weaker year overall.Dividend increased by 10%.The dividend has been increased every year since the Groups IPO in 2006.Order book exceeded half a billion

10、 pounds for the first time,with deliveries now extending out to 2037.Net funds above market expectations at 23.1m(2023:15.6m).22 11.021 2.524 23.123 15.6NET FUNDS/(DEBT)(M)23.1m20(4.7)1.See page 63.Record revenue,adjusted operating profit,order intake,closing order book and net funds.Adjusted operat

11、ing profit of 21.1m(2023:19.1m)on revenue of 202.5m(2023:182.7m).Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 2AT A GLANCEInnovative,agile,trustedCohort is a group of like-minded technology companies providing services and products for domestic and export

12、customers in the defence and security markets.Cohort was founded on the principle that agile businesses can prosper by being part of a larger group,benefiting from greater financial strength,an enhanced market presence and the opportunity to share knowledge and best practice.Our businesses provide l

13、ong-term value and future growth potential through innovative technology and agile decision making,within a framework of light-touch but effective governance.The Group reports its operating results in two divisions:This division comprises the subsidiary businesses which provide electronic hardware a

14、nd software solutions used for collecting,processing and communicating information securely.It also includes the provision of domain expertise,training and support services.The division supplies products,primarily through EID and MCL,and services through MASS.READ MORE ON PAGE 20This division,compri

15、sing Chess Dynamics,SEA and ELAC SONAR,provides sensors,including sonar,radar and visual,for land and sea domains.It also provides effectors for surface ships and land-based users to protect against threats including submarine,missile and drone attacks.The focus for the division is on electronic,ele

16、ctromechanical and software solutions to detect,measure,identify,track and prosecute targets of interest.READ MORE ON PAGE 21REVENUE BY DIVISION202.5m(2023:182.7m)Communications and IntelligenceREVENUE82.9m(2023:86.2m)Sensors and EffectorsREVENUE119.6m(2023:96.5m)A FULL REVIEW FOR EACH DIVISION IS A

17、VAILABLE IN THE OPERATING REVIEWMartin BennettManaging Director EIDClaire KingManaging Director MCLChris StanleyManaging Director MASSDavid Tuddenham Managing Director ChessRichard FlittonManaging Director SEABernd SzukayManaging Director ELAC SONARStrategic reportGovernanceFinancial statementsCohor

18、t plc Annual Report and Accounts 2024 3INVESTMENT CASEWhy invest in CohortWe are committed to delivering value to shareholders and ensuring they benefit from our success.Strong business modelExperienced leadership teams with core capabilities in defence and security.Subsidiaries operate with a signi

19、ficant degree of autonomy,enabling decision-making agility within a rigorous financial and strategic control regime.Close working relationships between our operating businesses,so they can benefit from each others technical capabilities,customer relationships and market knowledge.Consistent dividend

20、 track recordDividend increased by 10%in each of the last three years.Dividend increased every year since IPO in 2006.Strong balance sheet in place with robust funding.Active acquisition strategy Aim to accelerate growth by making selective,targeted acquisitions in the UK and overseas.Experienced ac

21、quisition team focused on careful selection and execution.Strong track record of growing acquired businesses.Financial strengthStrong financial position and record of success gives customers confidence to place major orders as exemplified by the 135m order from the Royal Navy in March 2024.Net cash

22、to fund product development and acquisitions(all acquisitions funded from cash flow and banking facilities since 2008).Group banking facility extended to July 2027.Access to attractive growth marketsInternational defence spending increasing following the invasion of Ukraine in 2022 and persistent te

23、nsions in the Asia Pacific region and the Middle East.Using our agility and innovation to build sustainable competitive advantage in niches with attractive prospects.Visibility of future earnings provided by growing order book518.7m of revenue on order as at 30 April 2024(30 April 2023:329.1m).92%of

24、 2024/25 latest external forecast revenue on contract at 30 April 2024(80%;equivalent for 2023/24 was 80%).Order book extends out to 2037.Social responsibilityProducts and services that make a real contribution to the security of our home nations and allies at a time of increasing risk and challenge

25、.Initiatives to support local communities,encourage STEM education and help armed forces charities.“Another record performance,slightly above market expectations,robust cash and a record closing order book.”Nick Prest CBE ChairmanREAD MORE AT COHORTPLC.COM/INVESTORSStrategic reportGovernanceFinancia

26、l statementsCohort plc Annual Report and Accounts 2024 4“The record order book gives Cohort visibility out to the next decade.Along with our strong net funds and market position this provides a solid foundation for future organic growth as well as the ability to make further strategic additions to t

27、he Group.”CHAIRMANS STATEMENTAnother record year and strong order cover for the coming yearfavourable timing of working capital flows and delayed expenditure on our new facility in Germany due to adverse winter weather.The Sensors and Effectors division saw a marked performance improvement.SEA made

28、the largest contribution to revenue growth and also significantly grew profit on the back of its strong order book.Another major factor was a turnaround at Chess,which saw growth in revenue as well as a sharply improved margin performance.Both are set to grow further following the Ancilia win.ELAC S

29、ONARs revenue grew,and it achieved an important milestone with the order for the third Italian submarine sonar system,though margin was affected by the cautious trading policy adopted on that large project,which is now beginning its production phase.The Communications and Intelligence division repor

30、ted a weaker year overall;we had previously indicated that we expected it to achieve a broadly level performance against last year as the record activity at MCL fell back to lower historical levels.Compared to the Sensors and Effectors division,Communications and Intelligence has so far seen less di

31、rect impact from global demand patterns.MASSs revenue is dominated by stable multi-year contracts from the UK,and EIDs also presently by its domestic customer in Portugal.MCL did benefit from domestic and international demand for drones and counter-drone systems.The result was the second-best annual

32、 performance in its history,but still some way behind the exceptional result of 2022/23.MASSs revenue and profit grew to a record level,and EID showed a modest performance improvement,although still posting a small loss in the year.These did not offset the reduction in MCLs contribution and the divi

33、sion had a weaker year overall.Performance The Group achieved a record adjusted operating profit of 21.1m(2023:19.1m)on record revenue of 202.5m(2023:182.7m),exceeding market expectations,and representing an increase of 11%on the prior year in both cases.As I said last December,the invasion of Ukrai

34、ne in 2022 and persistent tensions in the Asia Pacific region have driven continuing impetus for defence spending across the globe.This is reflected in the Group delivering a record year of order intake,winning 392.1m of orders(2023:220.9m),representing 1.9x full year revenue(2023:1.2x),and has resu

35、lted in a record closing order book of 518.7m(2023:329.1m).As well as growing in size,our order book has extended in duration,now stretching out to 2037.This reflects the significant naval orders the Group has secured over the last few years,which are typically long-term in nature.A notable example

36、of a naval order won in the period is the 135m order for SEAs Ancilia product secured in March 2024.As we said at the time,we expect this order with the Royal Navy to grow and we see a good pipeline of export opportunities for this and other product offerings for naval vessels,both surface ships and

37、 submarines.In the land domain,we are seeing increased demand for drone and counter-drone systems,driven by the Ukraine conflict.The attacks on shipping in the Red Sea show that drone defence is not only needed in the land environment.Other areas of increased demand include secure communications and

38、 electronic warfare.The Groups net funds also finished at a much higher level than we expected at the start of the year:23.1m compared with 15.6m in 2023.As well as reflecting the Groups profit performance,this resulted from Strategic initiatives On 31 May 2024,our business MCL(within our Communicat

39、ions and Intelligence division)acquired 100%of Interactive Technical Solutions Ltd(ITS)for a cash consideration of 3.0m paid from the Groups existing financial resources.ITS provides technical support,publications and services to the UK MOD and prime contractors,particularly in the area of military

40、vehicles.This acquisition is expected to be immediately earnings enhancing(see note 29).The Group continues to review acquisition opportunities as they arise,in line with our investment criteria.Shareholder returnsAdjusted earnings per share(EPS)were 42.89 pence(2023:36.48 pence).The adjusted EPS fi

41、gure was based on profit after tax,excluding amortisation of other intangible assets and net foreign exchange movements.Basic EPS were 37.87 pence(2023:27.92 pence).The adjusted EPS were 18%higher primarily due to the stronger adjusted operating profit(up 11%)and a lower tax rate on adjusted earning

42、s of 12.7%(2023:14.8%).The Board is recommending a final dividend of 10.10 pence per ordinary share(2023:9.15 pence),making a total dividend of 14.80 pence per ordinary share(2023:13.40 pence)for the year,a 10%increase.The dividend has been increased every year since the Groups IPO in 2006.It will b

43、e payable on 2 October 2024 to shareholders on the register at 23 August 2024,subject to approval at the Annual General Meeting on 24 September 2024.Over the medium term,the Group plans to maintain a policy of growing its dividend each year at a rate reflecting growth in earnings per share and capit

44、al requirements.Nick Prest CBE ChairmanStrategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 5CHAIRMANS STATEMENT CONTINUEDCapital allocationWe have a proven strategy supported by an appropriate capital allocation policy.As a Board we use this to inform our decisio

45、n making and it has been key to our progress.Our approach to capital allocation has three priorities:to deliver sustainable organic growth,through investment in our people,research and development and the capital requirements of the business;to find value generating complementary acquisitions;and to

46、 pay a progressive dividend.If all of the prior priorities are satisfied,then we will return excess capital to shareholders.At the current time we have a strong balance sheet with significant net cash which provides us with a range of options.OutlookCohort continues to see good demand for our produc

47、ts and services from both our domestic customers,especially the UK,and from export customers.The geopolitical tensions driving increased investment in defence have remained unrelenting during the year,with conflicts in Ukraine coupled with tensions in the Asia Pacific region leading to increased spe

48、nding internationally.Our order book underpins over 180m of current financial year revenue(2023:140m),representing over 90%of current market expectations of revenue for the year.Following order wins since the start of the financial year of over 70m,that cover now stands at just over 95%.the Audit Co

49、mmittee and as the Senior Independent Director.The Board and all Cohort staff are grateful to him for his sage advice and guidance.We formally welcomed Peter Lynas onto the Board as a non-executive director on 2 January 2024.Peter has had a long and successful career in the defence industry and brin

50、gs a wealth of experience in finance and general management to Cohort.Peter will take over from Jeff as Chair of the Audit Committee and Senior Independent Director.Throughout the last financial year we have continued to be guided by the 2018 edition of the QCA Corporate Governance Code(the QCA Code

51、)and we have been applying the new 2023 edition from 1 May 2024.The Board regularly evaluates and reviews the Groups environmental,social and governance(ESG)activity and is committed to maintaining appropriate standards.The Group has disclosed climate-related financial information for the second yea

52、r and has established governance mechanisms to oversee climate-related risks and opportunities.This year we have undertaken a qualitative scenario analysis which has deepened our understanding of the potential risks and opportunities under the three scenarios reviewed.The Board agreed that a disclos

53、ure in line with the mandatory climate-related financial disclosures under the Companies Act 2006(CFD)is appropriate for the Group given its size,industry sector and legal and regulatory requirements rather than a disclosure in line with TCFD.The Groups values,stakeholder engagement principles and g

54、overnance policies are all outlined on our website and in our Annual Report and Accounts.Our people As always,my thanks go to all employees within the Cohort businesses.Their hard work,skill and ability to satisfy our customers needs are what continue to drive the performance of our Group.The increa

55、sing order book and demand is driving a need for us to add to our work force,particularly for engineers and related technical skills.We have continued to invest in our graduate schemes and in work with local schools to support STEM activities.Recruitment challenges remain in some areas,especially hi

56、gh-level security cleared individuals,but overall we have increased our head count from 1,132 last April to 1,309 this April.Andrew Thomis,Simon Walther and their senior executive colleagues have continued their dedicated and skilful work which has helped the Group to continue its progress.I would l

57、ike to thank Shane Knight,who retired as Managing Director of MCL at the end of the financial year,for his dedication to MCL over 21 years and welcome Claire King as the new Managing Director.GovernanceHaving served on the Board for nine years,Jeff Perrin has decided not to stand for re-election as

58、a non-executive director at Cohorts forthcoming Annual General Meeting to be held in September 2024.Jeff has made an immense contribution to Cohort both as Chair of Overall we continue to expect another year of good growth in trading performance in 2024/25,enhanced by the addition of ITS.Given plann

59、ed capital expenditure and expansion in working capital to support our record order book,net funds are likely to decrease.We are optimistic that the Group will make further progress in 2025/26 and beyond,based on current orders for long-term delivery and on our pipeline of opportunities.Nick Prest C

60、BEChairmanDIVIDEND(PENCE PER ORDINARY SHARE)14.80p+10%22 12.2021 11.1020 10.1024 14.8023 13.40Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 6“2023/24 was yet another strong year of growth for the Group with increases in order intake,revenue,adjusted operati

61、ng profit and cash.”CHIEF EXECUTIVE OFFICERS REPORTDelivering defence technology that mattersAdjusted earnings per share increased by 18%to 42.89 pence per share reflecting the improved performance as well as tax credits received in overseas territories.Group net funds grew by 48%to 23.1m.As well as

62、 the improved adjusted operating performance,this benefited from delays to the planned capital expenditure on the new site in Germany,a result of bad winter weather.This delay in expenditure is expected to be caught up in 2024/25,and the Group net funds are expected to partially decline as a result.

63、Strategic progressThe Group has continued to make progress this year,achieving 11%organic growth in revenue and adjusted operating profit,in line with our target for double-digit growth.The record order intake,particularly in key areas of naval systems,has,as we have seen in recent years,increased a

64、nd lengthened our order book.We continue to see a good pipeline of prospects,both in our domestic and export markets.Key developments have included:O The selection of Ancilia,the new decoy launcher system,to protect the Royal Navys surface fleet against modern missile threats.As well as being a majo

65、r revenue and profit opportunity in its own right(it is the Groups largest ever single contract win),it represents a strong endorsement of Ancilia from an internationally respected customer.That is a boost to the systems wider export opportunities.OverviewFollowing an encouraging performance in 2022

66、/23 the Groups performance for the year improved again with strong growth in revenue,profit,order intake and cash.Overall,the results were ahead of market expectations.Sensors and Effectors performed strongly,offsetting the slightly weaker Communications and Intelligence division.In Sensors and Effe

67、ctors,Chess continued its improvement whilst SEA also delivered a better result on higher volume.In Communications and Intelligence,the expected fall back at MCL was not fully compensated by EID,which made a smaller loss than last year.Cash performance was also better than expected,resulting in anot

68、her strong positive net funds position at the year end.Order intake was a record high,and the resulting record order book of over half a billion pounds gives us a solid base for 2024/25 and beyond.We see good prospects for further significant new orders in the year ahead.Financial performanceThe Gro

69、ups revenue of 202.5m(2023:182.7m)was 11%higher than last year and delivered an adjusted operating profit of 21.1m(2023:19.1m),11%higher than last year.Work on naval systems has made a major contribution to performance,particularly within the Sensors and Effectors division.The Groups statutory opera

70、ting profit of 21.2m(2023:15.3m)reflects the amortisation of other intangible assets,a 3.1m non-cash charge in 2024(2023:3.7m charge)and the Research and Development credit(RDEC)of 2.9m(2023:0.9m)which in turn is offset by a higher tax charge.Andrew Thomis Group Chief Executive OfficerFind out moreH

71、IGHLIGHTS 2OUR STRATEGY 13OUR PEOPLE 37OPERATING REVIEW 19 O Chesss various offerings into ground-based air defence systems,especially against drones,have seen a strong demand in 2024 and this continues.O SEA secured its first customer for its complete Anti-submarine Warfare systems based upon its t

72、hin-line towed sonar array,Krait.As with Ancilia,this opens up wider export markets,especially in the Asia Pacific region.O ELAC SONAR secured the order to provide its Sphere sonar technology for the third Italian Navy submarine,confirming the customer endorsement of this ground-breaking technology.

73、The closing order book and pipeline provide a firm base for us to continue to deliver on our strategy and to also push our overall net margin for the Group from its current 1011%towards our target%of low to mid-teens within the next three to five years.In addition,the Groups strong net funds and ava

74、ilable banking facilities provide sufficient capital for us to continue to look for suitable businesses to add to the Group,either within an existing Group business or as a new standalone business,further accelerating the growth in revenue and adjusted operating profit.Strategic reportGovernanceFina

75、ncial statementsCohort plc Annual Report and Accounts 2024 7CHIEF EXECUTIVE OFFICERS REPORT CONTINUEDOur peopleAll the Groups capabilities and customer relationships ultimately derive from our people,and the success we have enjoyed is a result of their efforts.They have risen to the challenge of the

76、 stronger demand we have seen this year,and in doing so have made a material contribution to the national security and defence of our nations and allies as well as to the performance of the Group.I would like to take this opportunity to express my sincere thanks to all employees of Cohort and its bu

77、sinesses.At the year end,Shane Knight retired as Managing Director of MCL.His successor is Claire King,who has been with MCL for 12 years and formerly held the role of Business Development Director.Like many high-skill businesses,we are facing challenges in recruiting qualified and experienced peopl

78、e to meet our customer demands and our own investment strategies.As our order book has grown,so have our employee numbers and the Group now has just over 1,300 employees compared with nearly 1,130 this time last year,a 15%increase.We will continue to add more resources in the coming year,especially

79、at Sensors and Effectors,although we expect at a slower rate.AcquisitionsOn 31 May 2024,our subsidiary MCL(part of the Communications and Intelligence division)completed the acquisition of 100%of ITS for an enterprise value of 3.0m.This business will be integrated within MCL where it will continue t

80、o provide technical support and services to both MCL and external customers,including other members of the Group.This business typically works in the land domain,primarily on the UK military vehicle fleet either directly for the British Army or via prime contractors.The final completion accounts are

81、 expected to be concluded before the end of July 2024(see note 29).Andrew ThomisGroup Chief Executive2.3.1.Continuous investment in research and development,maintaining product offerings at the forefront of demanding environments and developing new technologies within the Groups core competencies.In

82、creasing by 26%to 14.8m in year.Complementary acquisitions driving growth in core areas where the Group can leverage industry knowledge.ITS was acquired in May 2024.A progressive dividend policy.An increase of 10%for the sixth year running.Capital allocationOur capital allocation policy is set out i

83、n the Chairmans statement.This is exemplified as follows:Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 8OUR MARKETSApplying advanced technology to protect and secure,we nurture agile partnerships across our marketsDefence and security O We supply electronic

84、s,software,electromechanical solutions and knowledge-based services to defence customers,across all domains,with a focus on maritime and land.O Direct customers include Ministries of Defence,platform providers,system integrators and infrastructure operators in national and international markets.Othe

85、r(non-defence and security)revenue O We provide high-integrity software and hardware solutions for transport systems.The Group also continues to support legacy products and services in non-defence areas with related technologies.Operating domainMaritime Equipment,systems and services operated primar

86、ily by navies for use on or below the surface,the shore and the airspace linked to the maritime domain.Land Equipment,systems and services operated primarily by armies on or from the land.This includes certain airborne assets such as uncrewed air systems,where deployed in support of the land domain.

87、Air and Space Equipment,systems and services for use in the air,in space,or in support of airborne or spaceborne assets.Joint and Strategic Equipment,systems and services supplied for use in a joint/multi-domain operating environment or in strategic-level headquarters and departments.Cyber and Secur

88、ity Equipment,systems and services operated by the armed forces,government and public and private sectors within the information and security environment.Revenue by domain24 5%7%2324 48%36%2324 10%8%2324 30%42%2324 2%3%234%2324 5%AIR AND SPACEMARITIMELANDCYBER AND INFORMATIONJOINT AND STRATEGICOTHER

89、Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 9GEOGRAPHIC ANALYSISRevenue by division and geographyFULL DETAILS AVAILABLE IN THE FINANCIAL STATEMENTSNORTH AND SOUTH AMERICATotal6.0m(2023:5.7m)Communications and Intelligence 0.1m(2023:0.4m)Sensors and Effect

90、ors 5.9m(2023:5.3m)OTHER EUROPEAN COUNTRIESTotal39.0m(2023:38.2m)Communications and Intelligence 1.1m(2023:2.1m)Sensors and Effectors 37.9m(2023:36.1m)GERMANYTotal9.0m(2023:4.3m)Communications and Intelligence 0.3m(2023:nil)Sensors and Effectors 8.7m(2023:4.3m)PORTUGALTotal10.3m(2023:5.0m)Communicat

91、ions and Intelligence 10.3m(2023:4.9m)Sensors and Effectors nil(2023:0.1m)ASIA PACIFIC AND AFRICATotal29.5m(2023:19.9m)Communications and Intelligence 4.4m(2023:5.7m)Sensors and Effectors 25.1m(2023:14.2m)UKTotal108.7m(2023:109.6m)Communications and Intelligence 66.7m(2023:73.1m)Sensors and Effector

92、s 42.0m(2023:36.5m)Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 10BUSINESS MODELSignificant competitive advantageOur purposeCohort delivers trusted and valued technology that protects us all.Through innovation,acquisition and organic business growth and ac

93、quisitions,we provide real value to our people,customers and shareholders.We support an entrepreneurial culture enabling our businesses to build solutions for the future of security and defence.We operate with deep-rooted knowledge and foster trusted relations with our customers and shareholders ali

94、ke.Significant competitive advantageBeing part of the Cohort Group brings significant advantages to our businesses compared with operating independentlyClear acquisition approach There are good businesses in the UK and overseas that would thrive under Cohort ownershipExpertise and technology from th

95、e GroupMarket accessFinancial strengthBolt-in acquisitionStandalone acquisitionAutonomous agile businesses combining niche technology with highly skilled people and an agile approachStrategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 11BUSINESS MODEL CONTINUEDHow

96、 we create valueWe create solutions to keep people safe.Acting with agility to find a better way,make smart decisions and meet customers needs.Where independent subsidiaries are free to grow,nourished by the strength and resilience of a supportive parent.Bringing the power of the Group to the ingenu

97、ity of our businesses.To deliver purposeful innovation that protects us all.Our peopleOur capabilities and customer relationships all ultimately derive from our people.Guided by our values,all employees across the Cohort Group can fulfil their potential,develop their careers,make a difference throug

98、h the roles that they undertake,and feel rewarded for what they do.Our shareholdersWe are committed to delivering value to our shareholders and ensuring that they benefit from our success.We are focused on delivering high standards of corporate governance and providing clear,consistent communication

99、.Our customersOur global customers depend on us to deliver reliably.We use innovation to stay at the forefront of defence and security technology solutions for our customers,aiming to be their trusted partner of choice.Our culture of openness and support makes us easy to do business with.Our supplie

100、rs and partnersOur suppliers and partners are critical to the success of our business.We work closely with them to build long-term relationships.We ensure that they are paid in line with our commitments for goods and services received.Our communitiesWe recognise the importance of engaging with our l

101、ocal communities.We do this through education,work experience,fundraising and sponsorship initiatives,and engage with many military and veterans charities.Across the Group we employ armed forces veterans and reservists and are proud to be a signatory of the UK Armed Forces Corporate Covenant.Strateg

102、ic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 12STRATEGYA clear strategy for growth Three key objectives form our clear strategy for growth.Consistently grow profits and cash generation organically through our subsidiaries.Increase the profitability of the Group a

103、nd access new markets through selective acquisitions.Ensure good corporate governance,sound management of subsidiaries and effective communications to shareholders.Organic growthDelivered through O A focus on developing long-term customer partnerships.O Encouraging innovation and responsiveness.O Id

104、entifying and pursuing growth opportunities in new and existing markets.O Developing high-quality leadership teams and a high-performance culture.What we did in 2023/24 O Strong organic revenue growth driving adjusted operating profit performance for the Group of 21.1m,up 2.0m(over 10%)on 2022/23.O

105、Record closing order book and improved visibility.On order cover for 2024/25 at record high of over 90%of latest external forecasts.Length of order book out to 2037.O Group headcount increased from 1,132 to 1,309 over the year to meet the demands to deliver the growing order book.Our priorities for

106、2024/25 O Continue to improve long-term order book across the Group.O Continue to expand pipeline,improve order intake and build a robust order book at EID.O Seek opportunities from increased focus on defence stance,especially in NATO and Southeast Asia.O Monitor and proactively manage supply chain

107、and recruitment challenges.O Improve efficiency of delivery to drive a better overall net margin.Acquisition Delivered through O Proactive engagement with businesses that can add value to the Group.O Maintaining a strong acquisition team.O Demonstrating a structure and culture that are attractive to

108、 potential sellers.O Creativity and flexibility in structuring transactions to bridge value gaps.What we did in 2023/24 O Evaluated numerous acquisition opportunities.O Negotiated the acquisition of ITS,by MCL,completed in May 2024.Our priorities for 2024/25 O Continue to seek value-adding acquisiti

109、ons with strong market positions in relevant sectors.Maintaining confidence Delivered through O Management of subsidiaries through a framework of financial control,strategy review,performance management and leadership development.O An effective operational strategy providing support and guidance whe

110、n circumstances change.O Providing clear and consistent investor communications through all channels.What we did in 2023/24 O Operational control improvements at Chess achieved.Improved delivery and profitability,with net margin increasing from just over 2%to over 10%.Legacy issues closed out.O Comm

111、enced a transformation programme at EID to improve its business winning and delivery performance.Our priorities for 2024/25 O Continue to embed risk management including climate-related reporting.O Complete the transformation at EID.Strategic reportGovernanceFinancial statementsCohort plc Annual Rep

112、ort and Accounts 2024 13STRATEGY CONTINUEDOperating strategyOrganic growthCohort reports through its two divisions:Communications and Intelligence;and Sensors and Effectors.Each of these divisions encompasses three of the Groups six operating businesses.O The Communications and Intelligence division

113、,comprising MASS,MCL and EID,has a focus on communications systems,intelligence gathering,secure information management and electronic warfare.They provide this through development and supply of products and the delivery of services including training and the development of EW countermeasures.O The

114、Sensors and Effectors division,made up of Chess,SEA and ELAC SONAR,is focused on technology,products and systems which enable our customers,primarily in the naval and land domain,to detect,track and respond to threats,whether land,air or sea based.Within our markets we have sought to identify niches

115、 where prospects are attractive and where we have some sustainable competitive advantage.Growth strategies and opportunities vary around the Group.Being part of the Cohort Group brings material advantages to our operating businesses.The Groups strong balance sheet gives customers the confidence to a

116、ward large or long-term contracts that we are well able to execute technically but which might otherwise be perceived as risky.Examples in the very recent past include the award of a 135m order for decoy launchers for the Royal Navy and sonar systems for the Italian Navys new class of submarine(now

117、near to 70m in value).We have also received orders for developing and supplying communication and related systems on the UKs new Dreadnought class of submarine,a very significant and strategically important programme as well as significant orders across the Group for communications,torpedo launch sy

118、stems and fire control systems for the New Zealand,Canadian and Australian navies respectively.The Groups directors have long experience of operating in the defence sector and have contacts and working relationships with senior customers in the UK and internationally that would be hard for independe

119、nt smaller businesses to establish.Our six operating businesses,while remaining operationally independent,have formed close working relationships with each other and benefit from sharing technical capabilities,customer relationships and market knowledge within the bounds imposed by our various confi

120、dentiality obligations.We will continue to work to promote the Groups services and products in wider markets,including through a joint presence at major exhibitions and targeted business development visits.These strategies have generated long-term customer relationships and good opportunities that g

121、ive us confidence that we can continue to win substantial new business in the years ahead.Looking forward,this year has begun well with some key export wins for ground based air defence systems and upgrades to existing submarine platforms,both in Europe.After some considerable delay due to a protrac

122、ted procurement process,we have secured the first of what we hope will be several long-term development and delivery contracts from the Portuguese armed forces.AcquisitionsAlongside our organic growth strategy,we continue to see opportunities to accelerate our progress by making further targeted val

123、ue enhancing acquisitions.We believe that there are good businesses in the UK and overseas that would thrive under Cohort ownership,whether as standalone members of the Group or as“bolt-in”acquisitions to our existing subsidiaries.The most likely candidates for bolt-in acquisitions are businesses wi

124、th capabilities and/or customer relationships that are closely linked to one of our existing subsidiaries.We would expect to integrate an acquired business of this nature fully within the relevant subsidiary.This could lead to both cost savings and benefits from shared access to markets and technolo

125、gies.For standalone acquisitions we are looking for agile,innovative businesses that have reached a stage of development where there will be mutual benefit in joining Cohort.It is likely that candidates will be operating in the defence and security markets either in the UK or internationally,and bro

126、adly within the capabilities of one of our divisions,as that is where the Group can add most value.Growth prospects,sustainable competitive advantage,and the ability to operate as part of a publicly quoted UK group will all be important.We have reviewed a significant number of possible acquisitions

127、over the last year,in some cases leading to active discussions.Our experienced executive team is conscious of the various potential risks that arise from acquisitions and takes a careful approach,with only a small proportion of the opportunities we see being brought to fruition.When we do identify a

128、n opportunity that we believe to be value creating,the close involvement of our senior team means we can be very flexible in terms of transaction structure and quick in decision making.That gives us some advantage compared to slower-moving competitors,even if they have larger resources available.Mai

129、ntain confidenceCohorts management approach is to allow its subsidiary businesses a significant degree of operational autonomy to develop their potential fully.At the same time,we provide rigorous financial and strategic controls at Group level to manage and control risks and ensure legislative and

130、regulatory compliance.Our experience is that our customers prefer to work with businesses where decision making is streamlined and focused on solving their immediate problems.This model provides us with a degree of competitive advantage over some larger rivals where the decision-making process can b

131、e more extended.It is also cost effective as it avoids the need for additional layers of management involved in coordination activities and for a large headquarters team.High-calibre employees find our business model attractive and more rewarding as it allows them to be involved in decisions affecti

132、ng the business,even at a relatively junior level,rather than being constrained to a narrow or purely technical role.This positions us well with customers where such attributes are highly valued.Our head office function continues to provide commercial support to the subsidiaries,particularly for exp

133、ort business,and assists in dealing with the ever-growing tide of compliance requirements.This includes increasingly wide and onerous external audit requirements,which are reflected in rising audit fees,and the need for external support for environmental and other reporting.Strategic reportGovernanc

134、eFinancial statementsCohort plc Annual Report and Accounts 2024 14STRATEGY IN ACTIONAddressing new markets through partnerships Countering the drone threatThe war in Ukraine has been characterised by the deployment of thousands of drones for surveillance,artillery guidance and delivering ordnance.Co

135、untering these fast-moving and agile drones requires new ground based air defence(GBAD)systems which can quickly identify and neutralise the incoming threat.Chesss strategy is to build upon its combat proven technologies and platforms,tailoring them to meet the evolving threats of modern warfare.As

136、an existing class-leading supplier of electro-optical fire control and targeting systems,Chess was well placed to develop a wide range of solutions to address the expanding scope of GBAD requirements.The well-established SeaEagle naval tracking system was adapted to meet the requirements of mobile l

137、and platforms.Developments included modifications to the tracking and stabilisation system,new sensors,land gun interfacing and specific ruggedisation and size improvements.These addressed the growing need for mobile multipurpose weapon systems to counter the increasing threat of drones.Cooperating

138、internally for growth Enhancing the survivability of naval vesselsSEA has a long-standing history of supplying decoy launchers for naval vessels to provide protection against missile attack.However,the effectiveness of the traditional fixed position decoy launcher has been materially reduced as a re

139、sult of the large investment in advanced anti-ship missiles being made by countries including China and Russia.Due to the speed of these threats,the time taken from identification of an incoming missile to the deployment of the decoy into the best location relative to the platform significantly redu

140、ces their effectiveness.This has resulted in a paradigm shift in countermeasure performance in the contemporary maritime electromagnetic warfare landscape.SEA responded to this threat by developing Ancilia,a trainable decoy launcher,ahead of its competitors.The product is a step-change in technology

141、 as it removes the need to manoeuvre the vessel to counter incoming missile threats.The ability to fire multiple decoy types in varying positions provides a truly flexible countermeasures solution.The development of Ancilia demonstrated the strategic value of close cooperation between two Cohort com

142、panies to solve a customer problem.Chess contributed its expertise in the design of high-performance turntables on naval platforms.Both companies invested in rapid and focused development,collaborating in a creative and innovative way to mature the product to the appropriate technology readiness lev

143、el.The team drove the Ancilia design to be as compact and lightweight as possible so that Ancilia can be easily accommodated and rapidly installed on a wider array of vessels,enhancing its export potential.SEA has been awarded a 135m contract for Ancilia by the UK MOD to provide the Electronic Warfa

144、re Countermeasures Increment 1a capability to the Royal Navy as part of its Maritime Electronic Warfare Programme(MEWP).It is the largest order a Cohort company has received to date and is a major contributor to SEAs strategic objective of growing its ship and fleet protection business line globally

145、.A key pillar of Chesss strategy is to partner closely with its prime contractor customers to make a real contribution to successful product development.Positioning Chess as a key differentiating element of an overall GBAD solution has allowed it to expand into this high growth area.Chess has also e

146、volved its existing Hawkeye multi-sensor product family to provide a Counter Uncrewed Air System(CUAS)capability with the latest in sensor detection and jamming technology.The new system integrates micro-doppler radar,passive radio frequency detection,acoustic and optical sensors to maximise the pro

147、bability of drone detection and minimise false alarm rates.The electro-optical subsystem comprises daylight and thermal cameras with a laser range finder and employs Chesss proprietary AI-powered Deep Embedded Feature Tracking(DEFT)algorithm to detect and track drones.The system can then slew a mult

148、i-band jammer capable of disrupting navigation and control signals to a target at a range of several kilometres.Both developments are contributing to Chesss strategic objective of growing its land domain fire control business line.Strategic reportGovernanceFinancial statementsCohort plc Annual Repor

149、t and Accounts 2024 15STRATEGY IN ACTION CONTINUEDCompeting through innovation Increasing the effectiveness of submarine surveillance For many years,hunter-killer submarine commanders have been asking ELAC SONAR to help increase the combat power of their boats through more timely detection and rapid

150、 localisation of hostile contacts long before their own boat is detected.This has become more challenging as submarines have become much quieter.A solution to the problem is to increase the size of the hydroacoustic sensor arrays.ELAC SONAR has developed an innovative Vertical Aperture Sonar(VAS)ahe

151、ad of the competition.In competing systems,the hydrophones are arranged on each side of a submarine in the horizontal plane only.The VAS system uses a large number of hydrophones to provide several thousand channels in both the horizontal and vertical planes.It consists of over a hundred modules cov

152、ering a length of around 40m on both sides of the submarine.All channels are now digitised outside of the submarines pressure hull under extreme conditions of pressure,salt water,widely fluctuating temperatures and water flow.VAS incorporates matched field processing,a new technique incorporating en

153、vironmental information into the signal processing algorithms.This means that localisation and depth estimation of targets is possible much more rapidly without the manoeuvre changes required for classical target motion analysis approaches.Submarine operations are increasingly taking place in shallo

154、w waters where acoustic transmission is particularly affected by the properties of the ocean.The improved localisation capability of VAS is especially useful in this environment.The system has also been optimised to take account of the limited power and cooling available on non-nuclear submarines.EL

155、AC SONAR has successfully tested VAS and is the only company producing exportable systems using match field processing.The VAS innovation is a key enabler in meeting ELAC SONARs strategic objective to grow its Sphere based large sonar system business line by helping to drive sales and increase marke

156、t share globally.Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 16KEY PERFORMANCE INDICATORSMeasuring our progressChange in revenue Indicates the change in total Group revenue compared with prior years.Why is it important?Revenue growth gives a quantified in

157、dication of the rate at which the Groups business activity is expanding over time.RESULTS11%Comment on resultsThe Group revenue was up on last year,increasing from 182.7m to 202.5m with strong contribution from the Sensors and Effectors division.Change in adjusted operating profitChange in Group ope

158、rating profit before exceptional items,amortisation of other intangible assets,research and development expenditure credits and non-trading exchange differences,including marking forward exchange contracts to market.Why is it important?The adjusted operating profit trend more accurately captures the

159、 business contribution to shareholder value than a pure cash measure.It is also an indication of whether additional revenue is being gained without profit margins being compromised.RESULTS11%Comment on resultsOn the back of the higher revenue,the trading result of the Group improved by a similar lev

160、el.Order book visibility Orders for the next financial year expected to be delivered as revenue,presented as a percentage of market revenue forecasts for the year as at 30 April 2024.Why is it important?Order book visibility,based on expected revenue during the year to come,provides a measure of con

161、fidence in the likelihood of achievement of future forecasts.RESULTS92%Comment on resultsThis is a further improvement on the last three years,reflecting the continuing progress in the size and longevity of the order book,with orders now stretching out to 2037(2023:2032).The order book cover for 202

162、4/25 had further increased to over 95%by mid-July 2024.Good progress in KPIs.Cash conversion consistently strong.22(4)%24 11%23 33%22(17)%24 11%23 23%22 78%24 92%23 80%Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 17Change in adjusted earnings per shareAnnu

163、al change in earnings per share,before exceptional items,amortisation of other intangible assets and non-trading exchange differences including marking forward exchange contracts to market,all net of tax.Why is it important?Change in adjusted earnings per share is an absolute measure of the Groups r

164、eturn to shareholders(net of tax and interest).RESULTS18%Comment on resultsThe 18%increase compares to an 11%increase in the adjusted operating profit,reflecting a lower tax rate due to overseas R&D tax credits.Operating cash conversion Net cash generated from operations(net of interest and net capi

165、tal expenditure)before tax as compared to the profit before tax and interest,excluding amortisation of other intangible assets over a rolling four-year period.Why is it important?Operating cash conversion measures the ability of the Group to convert profit into cash.RESULTS98%Comment on resultsThe c

166、onversion in the last year improves a high conversion ratio of the last two years and was as a result of strong cash control in the Sensors and Effectors division.We expect the cash conversion in the coming year to decline slightly as the capital expenditure at ELAC SONAR for its new facility reache

167、s a peak.International revenue Total sales to markets outside the UK,Germany and Portugal.Why is it important?International markets are important to the organic growth of the business and reduce our dependence on domestic markets.RESULTS74.5mComment on resultsThe increase in 2024 export revenue is d

168、riven by higher export sales in Sensors and Effectors,especially for naval customers of SEA.22 48.8m24 74.5m23 63.9mKEY PERFORMANCE INDICATORS CONTINUED22 87%24 98%23 87%22(8)%24 18%23 17%Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 18OPERATING REVIEWTechn

169、ology innovation that protects us allIn the Communications and Intelligence division,MASS continues to deliver net margins in excess of 20%and we expect that to continue.As expected,MCLs net margin fell back from its high of last year as its volume reverted to a lower level.MCLs net margin is typica

170、lly low double digit with the occasional uplift.EID has traded poorly for the last few years and posted another loss albeit smaller than last year.The net margin for EID remains unacceptably low.With the first of the expected new orders now received this should begin to recover in the current year.O

171、verall,we expect the Communications and Intelligence division to deliver a net margin percentage in the high teens.When the above are combined with the central costs,we are targeting an overall net margin for the Group in the mid-teens percent in the next three to five years.Andrew ThomisChief Execu

172、tive“Robust growth in Sensors and Effectors.Communications and Intelligence slightly behind last year.”In this review the focus is on the adjusted operating profit of each division,which we consider to be a more appropriate measure of performance year on year.The adjusted operating profit is reconci

173、led to the operating profit in the Consolidated income statement,and this is broken down by reporting segment in note 1.The adjusted operating profit margin(net margin)of the Group was 10.4%,in line with that achieved in 2022/23.The net margin was slightly lower in Communications and Intelligence wi

174、th lower UK MOD sales at MCL partly offset by the slightly better performance at EID,which made a smaller loss than last year.In Sensors and Effectors,the net margin was higher.This was mostly driven by the significantly improved performance at Chess,partly offset by a weaker mix at SEA.As we have i

175、ndicated previously,we are expecting these net margins to increase over the mid-term.We expect Sensors and Effectors to be able to yield net margin percentages in the mid-teens.This should be achieved from the delivery of the strong order book,especially at SEA,with the overhead footprint of the SEA

176、 and Chess businesses now established at a suitable level to deliver their current order books for the next few years.At ELAC SONAR,the last few years have seen cautious trading on the Italian sonar project as it progresses through its development phases,holding ELAC SONARs net margins down.Early pr

177、oduction work has now commenced,and this will begin in earnest in 2024/25.We will review the approach to project margin as major milestones are achieved.Adjusted operating profit by reporting segments:Adjusted operating profitAdjusted operating margin2024m 2023m2024%2023%Communications and Intellige

178、nce12.814.9 15.617.3Sensors and Effectors12.89.4 10.59.7Central costs(4.5)(5.2)21.119.1 10.410.4Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 19OPERATING REVIEW CONTINUEDCOMMUNICATIONS AND INTELLIGENCEREVENUE 82.9m(2023:86.2m)ADJUSTED OPERATING PROFIT 12.8m

179、(2023:14.9m)NET CASH FLOW GENERATED FROM OPERATIONS 3.2m(2023:8.3m)HEADCOUNT 484(2023:432)Communications and Intelligence delivered a weaker performance on slightly lower revenue.This was due to lower activity with the UK MOD,primarily through MCL where last year we saw a record performance.Elsewher

180、e in this division,MASS continued to be the largest contributor to Group profit delivering a net margin of 22.5%(2023:23.2%)on higher revenue.The Communications and Intelligence division enters 2024/25 with 63.2m(2023:59.1m)of its revenue on order at 30 April 2024.This is slightly higher than last y

181、ear and we expect to see improvements in Portugal,in terms of both deliveries and orders as well as some good prospects at MCL.We expect this division to deliver a better performance in 2024/25,in part a recovery at EID as orders from the Portuguese Army and Navy arrive.MASS enters 2024/25 with a re

182、cord high of contractual revenue cover at 90%.MCL,although at a much lower cover,more in line with its historical norm,is already seeing a rise in customer activity.As demonstrated in 2022/23,it can respond rapidly to this.Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Ac

183、counts 2024 20OPERATING REVIEW CONTINUEDSENSORS AND EFFECTORSREVENUE 119.6m(2023:96.5m)ADJUSTED OPERATING PROFIT 12.8m(2023:9.4m)NET CASH FLOW GENERATED FROM OPERATIONS 21.5m(2023:5.9m)HEADCOUNT 805(2023:682)The Sensors and Effectors division delivered a much improved operating performance on signif

184、icantly higher revenue.Revenue grew at all three businesses in the division,with SEA and Chess also showing strong profit growth.The division saw growth in revenue to export customers,including in Europe,South America,Canada and the Asia Pacific region.Following significant order wins last year from

185、 customers in Germany and the UK,revenue increased to these two countries and going forward,as a result of the Ancilia contract,the UK MOD revenue will continue to rise.Other significant orders included follow on orders for Italy and New Zealand and new orders for Canada and Australia as well as a r

186、ange of other European and Asia Pacific customers.Looking forward,this division is well underpinned for 2024/25 with over 120.9m(2023:83.6m)of revenue on order at 30 April 2024.The significant order book and good prospects,some of which have already been secured,gives us confidence that this divisio

187、n will grow in the coming few years.Over that period we expect that its net margin,as a percentage,should rise into the early teens.The amount of activity between our businesses has grown in the year,as typified by SEA and Chess collaboration on the Ancilia product and subsequent winning of the MEWP

188、 project for the Royal Navy,and we expect that to continue.We will ensure that the necessary coordination and oversight to manage this is provided both within the respective businesses and from our head office to ensure that we are able to deliver these more complex programmes while maintaining the

189、autonomy and agility that are so important for our operating businesses.Andrew ThomisGroup Chief ExecutiveStrategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 21FINANCIAL REVIEWRecord operating performance Simon Walther Finance Director“Record revenue driven by ex

190、ports.Record order intake and a record closing order book,dominated by Sensors and Effectors.”Revenue analysisThe Group reports its segmental revenue through its two divisions:Communications and Intelligence;and Sensors and Effectors.The revenue for the Group is also analysed into three separate bre

191、akdowns:1.market(and geography)(see table below);2.product or service(see table below);and3.domain(see“Our markets”section).The Group revenue continues to be dominated by defence and security customers with 191.6m(2023:169.8m)delivered to these markets,95%of Group revenue(2023:93%).Overall,the Group

192、 increase in revenue has been driven by an increase in export and activity with our domestic customers in Germany and Portugal.UK MOD revenue decreased slightly to 96.8m(2023:98.5m),but as a proportion of Group revenue was lower at 48%(2023:54%)due to the increase in exports.Export defence markets g

193、rew by 23%(2023:20%),and as a proportion of the overall revenue increased from 32%last year to 36%this year.The increase was in deliveries to European customers,mostly land domains,and,as expected,into Asia Pacific for naval customers.In our other domestic markets,as expected we again saw growth in

194、both Portugal and Germany.In Portugal,EIDs revenue reflects the current importance of its domestic customer.Depending upon the timing of orders we expect this revenue to grow and remain an important element of EIDs revenue stream over the next few years.Non-defence revenue,including transport and le

195、gacy hydroacoustic products,was slightly lower.Both are reported within Sensors and Effectors.REVENUE202.5m(2023:182.7m)ADJUSTED OPERATING PROFIT21.1m(2023:19.1m)CASH GENERATED FROM OPERATIONS+29.6m(2023:+17.9m)The Group continues to see the larger proportion of its revenue from product(hardware and

196、/or software).The increase in the absolute revenue this year was driven by export orders,especially naval systems to Asia Pacific and Europe partly offset by the expected decline at MCL.The service element of the Groups revenue increased from last year,driven by higher revenue at MASS and a marked i

197、ncrease in support work to the Royal Navy at SEA.In the past,the service revenue has typically been around 40%;this has fallen in recent years as the product and systems activity,especially at Chess,ELAC SONAR and SEA,has increased.Going forward,we continue to work on increasing the support and serv

198、ices work at Chess and EID.The Groups revenue this year has driven an increase in statutory gross margin percentage from 36%to 38%.The main cause of the increase in statutory reported gross margin was an improvement in margins in Sensors and Effectors,particularly at Chess where the changes we made

199、have seen it close out most of its legacy low margin projects and improve its margins on new work.ELAC SONARs gross margin was consistent with last year.SEAs gross margin was also slightly weaker due to the mix of work,especially an export contract containing a large element of sub-contractor effort

200、 which we expect to completely close out in 2025/26.In Communications and Intelligence,the gross margin saw improvement at MCL due to mix and weaker margin at EID due to more deliveries to its domestic customer.MASS was unchanged.The analysis of the Groups revenue by domain is set out in the Our mar

201、kets section.This shows that the Groups revenue is dominated by maritime and land,a combined 78%of Group revenue(2023:78%).The next significant area is Joint and Strategic at 10%(2023:8%)which is mostly Communications and Intelligence support to the UKs Joint Warfare capability.The growth in maritim

202、e is due to an increase in exports in Sensors and Effectors,mainly SEA.Land domain has fallen back from its peak last year due to the expected fall back to more historically normal levels at MCL in Communications and Intelligence.Going forward,we expect the maritime domain to remain dominant althoug

203、h we should see growth in other security work,albeit a small element of the overall Group revenue.Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 22FINANCIAL REVIEW CONTINUEDRevenue by market and geographyCommunications and IntelligenceSensors and EffectorsGr

204、oup2024m2023m2024m2023m2024m%2023m%Direct to UK MOD 58.0 62.1 10.7 0.2 68.7 3462.334Indirect to UK MOD where the Group acts as a sub-contractor or partner 5.0 7.3 23.1 28.9 28.1 1436.220Total UK defence 63.0 69.4 33.8 29.1 96.8 4898.554UK security 3.6 3.7 3.6 23.72UK other(non-defence and security)0

205、.1 8.2 7.4 8.3 7.4 Total UK 66.7 73.1 42.0 36.5 108.7 109.6 Portuguese defence and security 10.3 4.9 10.3 54.93German defence and security0.3 8.7 4.3 9.0 44.32Total non-UK domestic defence and security10.64.98.74.319.399.25Export defence and security Other European countries 1.1 2.1 36.4 33.7 37.5 3

206、5.8 Asia Pacific and Africa 4.4 5.724.4 12.3 28.8 18.0 North and South America 0.1 0.4 5.5 4.25.6 4.6 Total export defence and security 5.68.2 66.3 50.2 71.9 3658.432 Export other(non-defence and security)2.65.52.6 5.5 82.9 86.2 119.6 96.5 202.5100182.7100Revenue by type of deliverableYear ended30 A

207、pril 2024Year ended30 April 2023m%m%Product 148.4 73 140.877Communications and Intelligence 45.1 22 53.829Sensors and Effectors 103.3 51 87.048 Services 54.1 27 41.923Communications and Intelligence 37.8 19 32.418Sensors and Effectors 16.3 8 9.55 Total revenue 202.5 100 182.7100Strategic reportGover

208、nanceFinancial statementsCohort plc Annual Report and Accounts 2024 23Operational outlookOrder intake and order bookOrder intakeOrder book2024m 2023m2024m2023mCommunications and Intelligence64.394.5108.0126.7Sensors and Effectors327.8126.4410.7202.4392.1220.9518.7329.1The increase in the Groups orde

209、r book reflects the very strong order intake in Sensors and Effectors.As expected,the Communications and Intelligence order intake was lower than last year,which was impacted by very high activity seen last year at MCL.The 2023/24 order intake was 194%(2023:121%)of the Groups revenue for the year.Th

210、e revenue on order(order cover)for the coming year was over 90%(2023:80%)as at 30 April 2024,based on the latest external revenue forecasts.This had risen to over 95%in July.The Groups order intake and order book are the contracted values with customers and do not include any value attributable to f

211、rameworks or other arrangements where no enforceable contract exists.The order intake and order book take account of contractual changes to existing orders including extensions,variations and cancellations.Communications and IntelligenceOrder intake at Communications and Intelligence was 32%lower th

212、an last year and represented 78%of its annual revenue for 2023/24(2023:110%).The lower order intake was a result of MCL coming off of its record performance of last year.Elsewhere in this division,MASS has continued to deliver on its long-term contracts which are not due for renewal until 2026 at th

213、e earliest.This results in an expected step down in the order book from year to year and the order cover against revenue being lower between renewal years.EID had another weak year of order intake,but we expect a stronger order inflow in 2024/25 as orders are received from its domestic customer.This

214、 division is dominated by activity with the UK MOD where 41.1m of its order intake(2023:70.4m)was ultimately intended for that customer.The decrease was at MCL following high demand last year for communication equipment including hearing protection and intercoms.Important orders secured in the year

215、included renewals and extensions of long-term contracts for our support to the UKs Joint Forces Command(8.5m),electronic warfare capability and the UKs strategic deterrent.The Group has been providing services in all these areas for several decades.Orders from other UK Government security department

216、s was 13.5m(2023:3.4m),primarily in cyber services that MASS provides.Sensors and EffectorsOrder intake at Sensors and Effectors was very strong,159%higher than last year at 327.8m,representing 272%of its 2023/24 annual revenue(2023:131%).The much higher order intake reflects the large long-term con

217、tracts secured by SEA and continuing good momentum at Chess.This year was dominated by the large order(over 135m)for our Ancilia system from the Royal Navy.This order will supply and support systems for seventeen surface ships and runs until 2037.Other important Royal Navy work included orders for t

218、he next batch of Type 26 frigates and the Dreadnought submarines.In export markets,the division secured various product orders for Australia and Canada(Type 26)and New Zealand(ANZAC frigates).SEA also secured an important export customer for its Anti-submarine Warfare system based on its thin-line t

219、owed sonar array,Krait.In Europe we continue to win work,including orders of nearly 7m for the German Navy.A follow-on order for the Italian sonar programme(Boat 3)was received by ELAC SONAR,endorsing its solution for the new class of Italian submarines.We continue to see good prospects in the marit

220、ime domain for our products,both in export markets as well as our domestic markets,and the success of Ancilia adds to this pipeline.In the land domain,Chess has seen a marked increase in demand for its stabilised fire control and tracking systems,particularly in countering drones as part of ground-b

221、ased air defence solutions.This demand is mostly focused in Europe and Chess secured around 17m of orders with some good prospects for the coming year and beyond.FINANCIAL REVIEW CONTINUEDStrategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 24FINANCIAL REVIEW CONT

222、INUED“The Group order book underpins over 90%of the 2023/24 latest analyst forecasts for revenue.This has increased to over 95%in July.”Sensors and Effectors continued Delivery of the Groups order book into revenueThe table below shows the expected delivery of future revenue from the current order b

223、ook.Order intake analysis COMMUNICATIONS AND INTELLIGENCE SENSORS AND EFFECTORS30 April 2024108.0410.7H1 2024/2534.869.15505004504003503002502001501005005505004504003503002502001501005002024202320242023Later years4.5153.2H2 2024/2528.451.8Total 2024/2563.2120.92025/2625.980.02026/2714.456.6m COMMUNI

224、CATIONS AND INTELLIGENCE SENSORS AND EFFECTORS30 April 2023126.7202.4H1 2023/2439.744.8Later years17.048.1H2 2023/2419.438.8Total 2023/2459.183.62024/2531.839.42025/2631.318.8m TOTAL ORDER VALUE NUMBER OF ORDERS TOTAL ORDER VALUE NUMBER OF ORDERS100k100k1m to 5m1m to 5m500k to 1m500k to 1m100k to 50

225、0k100k to 500k5m to 10m5m to 10m10m and above10m and aboveNumber of ordersNumber of orders25020015010050080706050403020100Order value(m)Order value(m)42311501501,2281,566455.113.132.130.417.572.373.66114.1230.91,6001,4001,2001,00080060040020001,6001,4001,2001,0008006004002000243323.626.2814320.6Stra

226、tegic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 25FINANCIAL REVIEW CONTINUEDSensors and Effectors continuedDelivery of the Groups order book into revenue continuedCohorts order book has again increased in size and lengthened in duration.We already have on order f

227、or delivery in 2024/25 over 90%of the external expectations for the year.The order book for Sensors and Effectors is both larger and longer than for Communications and Intelligence,which is what we expect with the greater proportion of long-term delivery projects for naval customers.In Communication

228、s and Intelligence,the longevity of the order book is dominated by the multi-year support contracts for the UK MOD through MASS,the first of which is due for renewal in 2026.The short-term nature of some of the business in Communications and Intelligence,especially the product delivery of MCL and th

229、e shorter delivery contracts in training and cyber by MASS,means that this division will typically enter a financial year with less revenue on order.This work is often short in duration.We do expect to see some increase in the longevity of this divisions order book in the coming year when anticipate

230、d orders for the Portuguese Navy arrive.Sensors and Effectors has a number of large multi-year programmes,both for delivery and support,with work now stretching out to 2037.The prospects for this division in the coming year to further increase the size of the order book are good,both in the UK and e

231、xport markets.The Groups businesses are not dependent upon a single critical order to achieve their respective revenue targets for 2024/25.The Group infill for the coming year of under 10%is a historically low level and this had further reduced to under 5%in July 2024.We introduced last year an anal

232、ysis of the number of orders secured by a range of order size.This is shown in the“Order intake analysis”chart on page 25.This shows that 95%(2023:95%)of the Groups orders(by number)secured are of less than 0.5m in value,accounting for 11%(2023:23%)of the Groups total order intake value.The remainin

233、g 5%of orders account for nearly 90%(2023:77%)of the Groups total order value.The Ancilia order secured by SEA in March 2024(announced at 135m)has distorted some of the value comparatives but as we have seen over the last few years,the Group is winning more large individual orders.This year it has w

234、on ten(2023:nine)orders larger than 5m and a total order value of 257.1m(2023:69.2m).As a policy,we usually only announce individual orders with a value of over 10m.Funding resource and policyAt 30 April 2024,the Groups cash and readily available credit was 58.1m(2023:50.6m).A very high proportion o

235、f our ultimate customers are governments or government agencies,with a clear need to invest in defence and security.The international and domestic security environment still calls for greater resources to be devoted to defence and counterterrorism in the UK and many other countries,especially in lig

236、ht of continuing events in Ukraine and rising tensions in the South China Sea.As already mentioned,over 90%of our revenue(based on latest analyst forecasts)for 2024/25 was on contract at 30 April 2024,providing further assurance,and this has since increased to over 95%.The Board therefore considers

237、the Group to be a going concern.As set out in our capital allocation policy,the Group retains a robust financial position and continues to be cash generative,enabling it to continue to invest in internal R&D and other value-adding projects on a carefully considered basis as well as maintaining its p

238、rogressive dividend policy.The Groups cash position and banking facility also provide it with the resources to conduct its acquisition strategy.The Group completed a renewal of its banking facility on 18 July 2022.The facility was initially for three years to July 2025,and this has been extended,aga

239、in,following exercise of an option,in May 2024,to July 2027.The revolving credit facility(RCF)is for an initial 35m with an option(accordion)to draw a further 15m.The facility is provided by three banks:NatWest,Lloyds and Commerzbank.There are no further options to extend this current facility and w

240、e will enter discussions with our banks in 2025/26 to renew the facility which is due to expire July 2027.The Groups bank borrowings have been reported as due after one year as the facility in place as at 30 April 2024 was due to expire in July 2026.NatWest is the Groups primary bank in the UK,espec

241、ially for clearing purposes and day-to-day transactions.Commerzbank undertakes a similar role in Germany for ELAC SONAR.The Groups facility in place as at 30 April 2024 was for 35m,of which 16.5m was drawn,leaving 18.5m available to be drawn down.The facility itself provides the Group with a flexibl

242、e arrangement to draw down for acquisitions and overdraft.The Groups banking covenants were all passed for the year ended 30 April 2024.Looking forward,we expect this to continue out to 31 July 2025 and beyond.The facility is available to the UK and German members of the Group and is fully secured o

243、ver the Groups assets.EIDs assets are excluded but the shares that the Group owns in EID are included as part of the Groups security package with the banks.In the UK,the Group has separate bilateral facilities with each of NatWest and Lloyds for instruments such as forward exchange rate contracts,ba

244、nk guarantees and letters of credit.In addition,the Group is free to arrange such facilities with other banks where pricing and operational efficiency warrant it.For example,we have a forward exchange facility with Investec Bank.The Group has a bilateral facility in place with Commerzbank for provis

245、ion of similar banking instruments to ELAC SONAR in Germany.The Group takes a prudent approach to treasury policy with its overriding objective being protection of capital.In implementing this policy,deposits are usually held with institutions with credit ratings of at least Baa3.Deposits are genera

246、lly held on short(less than three months)duration to maturity on commencement.This matches the Groups cash resources with its internal monthly 13-week cash forecasts,retaining flexibility whilst trying to ensure an acceptable return on its cash.Most of the Groups UK cash(that is not on short-term de

247、posit)is managed through a set-off arrangement,enabling the most efficient use of the Groups cash from day to day,under the supervision of the Groups finance function.EIDs bank facilities are managed locally in Portugal.The cash is spread across a number of institutions to minimise capital risk.EID

248、provides no security over its assets and its wide range of banks enable it to be well supported in executing export business,specifically in respect of foreign exchange contracts,guarantees and letters of credit.EID has a local overdraft facility of 2.5m with Santander.This was undrawn as at 30 Apri

249、l 2024.The Group regularly reviews the ratings of the institutions with which it holds cash and always considers this when placing a new deposit.The Groups net funds at 30 April 2024 were 23.1m(30 April 2023:15.6m),better than expected due to a marked improvement in working capital management at MCL

250、 and SEA and lower capital expenditure spend on its new facility by ELAC SONAR due to adverse winter weather.The increase in activity and order book has resulted in a marked increase in both the Groups trade and other receivables and trade and other payables.The impact is minimal with an increase of

251、 only 1.3m in net trade related liabilities since last year.Looking forward,we expect the Groups net funds at 30 April 2025 to be lower,as the timing advantage is expected,in part,to unwind.We expect to see the impact of greater expenditure on the facility work in Germany and also the recently compl

252、eted purchase of Interactive Technical Solutions for 3.0m in cash.As at 30 April 2024 the Group had invested 4.1m in the new German facility with a further 10.0m due to be spent in the current year.The Group expects to see an increase in net funds by 30 April 2026 from 2025,if there is no further co

253、rporate activity.Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 26FINANCIAL REVIEW CONTINUEDFunding resource and policy continuedIn addition to its cash resources,the Group has in issue 41.6m ordinary shares of 10 pence each.Of these shares 0.9m(2023:0.7m)ar

254、e owned by the Cohort plc Employee Benefit Trust(EBT),which waives its rights to dividends.In addition,the Group has issued options over ordinary shares through Key Employee Share Option and SAYE schemes to the level of 1.9m at 30 April 2024(2023:1.7m).The Groups exposure to foreign exchange risk ar

255、ises from two sources:1.the reporting of overseas subsidiaries earnings(currently EID and ELAC SONAR)and net assets in sterling;and 2.transactions in currencies other than our Group reporting currency()or subsidiary reporting currency where different(currently at EID and ELAC SONAR).The first risk i

256、s a translation rather than a transaction risk and we do not hedge the translation of earnings.In terms of reporting asset values,we have in place a natural hedge of borrowing in euros to acquire a euro asset(ELAC SONAR)but over time,as the asset grows and the loan diminishes,this hedge will wane.We

257、 take a prudent approach to transactional foreign exchange risk requiring all significant sales and purchases to be hedged at the point in time when we consider the transaction to be certain,usually on contract award.We mark these forward contracts to market at each reporting date,recognising any ga

258、in or loss in the income statement.The Group has maintained its progressive dividend policy,increasing its dividend this year by 10%to a total dividend paid and payable of 14.80 pence per share(2023:13.40 pence).The last five years annual dividends,growth rate,earnings cover and cash cover are as fo

259、llows:DividendPence Growth overprevious year%Earnings cover(based upon adjustedearnings per share)Cash cover(based uponnet cashinflow fromoperations)202414.8102.93.7202313.4102.73.0202212.2102.63.9202111.1103.03.6202010.1113.72.820199.1113.82.3Looking forward the Group plans to maintain a policy of

260、growing its dividend each year at a rate reflecting growth in earnings per share and capital requirements.In summary,the Groups cash performance in 2023/24 was as follows:2024m2023mAdjusted operating profit21.119.1Depreciation and other non-cash operating movements3.43.0Working capital movement1.8(5

261、.5)26.316.6Acquisition of the non-controlling interest of Chess(1.0)Tax,dividends,capital expenditure,interest and other investments(18.8)(11.0)Increase in funds7.54.6The higher cash outflow in tax and dividends,etc.was mostly due to tax paid(4.6m higher),net investment in own shares of 1.1m,0.6m hi

262、gher than last year,and capital expenditure(1.5m higher).The balance was higher dividends and a lower level of new shares issued.The higher tax payment included a payment in Germany of 2.7m(2023:nil)which was an alignment of the local tax base with IFRS.The higher capex was mostly a result of initia

263、l investment in our new German facility and certain key items of capital equipment for the Italian sonar programme.We expect the capital expenditure in the coming year on this facility build to peak as we approach completion in the summer of 2025.Looking forward,we retain the flexibility to use newl

264、y issued shares as well as EBT shares to satisfy employee share options.The Groups customer base of governments,major prime contractors and international agencies makes its debtor risk low.The year-end debtor days in sales were 55 days(2023:33 days).This calculation is based upon dividing the revenu

265、e by month,working backwards from April,into the trade debtors balance(excluding revenue recognised not invoiced)at the year end.This is a more appropriate measure than calculating based upon the annual revenue as it takes into account the heavy weighting of the Groups revenue in the last quarter of

266、 each year.The increase has been mostly in Sensors and Effectors due to high deliveries at the year end,particularly in Canada.TaxThe Groups tax charge for the year ended 30 April 2024 of 4.5m(2023:charge of 2.7m)was at a rate of 22.9%(2023:19.2%)of profit before tax.This includes a current year cor

267、poration tax charge of 6.4m(2023:3.2m),a prior year corporation tax credit of 0.6m(2023:0.4m)and a deferred tax credit of 1.3m(2023:0.1m),mostly in respect of the current year.The Groups overall tax rate of 22.9%was below the standard UK corporation tax rate of 25.0%(2023:19.5%).The decrease is due

268、to an R&D credit recognised in Portugal,as there was in 2023,partly offset by a higher contribution from Germany(at 31.6%).The Group has reported research and development expenditure credits(RDEC)for the UK in accordance with IAS 20 and shown the credit of 2.9m(2023:0.9m)in cost of sales and adjuste

269、d the tax charge accordingly.The RDEC has been reversed in reporting the adjusted operating profit for the Group to ensure comparability of operating performance year on year.Looking forward,the Groups effective current tax rate(excluding the impact of RDEC reporting)for 2024/25 is estimated at less

270、 than 20%compared with 13%of the pre-RDEC adjusted operating profit less interest for 2023/24.The Group maintains a cautious approach to previous R&D tax credit claims for tax periods that are still open,currently 2022/23 and 2023/24 as well as the potential outcome of a tax audit in Portugal.Adjust

271、ed earnings per shareThe adjusted earnings per share(EPS)of 42.89 pence(2023:36.48 pence)are reported in addition to the basic earnings per share and exclude the effect of amortisation of intangible assets and exchange movement on marking forward exchange contracts to market,all net of tax.The adjus

272、ted earnings per share exclude non-controlling interest of EID(20%).The reconciliation from last year to this year is as follows:Adjusted operatingprofitmAdjustedearningsper sharePenceYear ended 30 April 202319.136.48100%owned businesses throughout the year ended 30 April 20241.43.02Impact of busine

273、sses with minority holding0.61.04Change in tax rate(excluding RDEC):12.7%(2023:14.8%)0.93Other movements including interest and lower weighted average share capital1.42Year ended 30 April 202421.142.89Increase from 2023 to 202411%18%The adjustments to the basic EPS in respect of exchange movements a

274、nd other intangible asset amortisation of EID only reflect that proportion of the adjustment that is applicable to the equity holders of the parent.Accounting policiesThere were no significant accounting policy changes in 2023/24.Simon WaltherFinance DirectorStrategic reportGovernanceFinancial state

275、mentsCohort plc Annual Report and Accounts 2024 27 ShareholdersWho engaged:Non-executive directors,executive directors and Company Secretary.Key areas of interest:Financial performance,dividends,share price,strategy,business model,remuneration and behaviours towards other stakeholders.How we engaged

276、:O We released communications such as trading updates and other important announcements via a regulatory news service.We made our Annual Report available to all shareholders and other interested parties together with notices of general meetings.O Live Q&As were hosted for shareholders after the prel

277、iminary results and interim results webcast presentations.O Cohort hosted two investor days during the year at Chess in Horsham and at SEA in Barnstaple.Both events were well attended and provided an opportunity for engagement with members of the Cohort Board and the managing directors of the releva

278、nt subsidiaries.O Regular meetings were held with institutional shareholders and prospective shareholders.O We made regular updates to information in the Investors section of our corporate website.What we have done:O We continued to explore strategic investment opportunities for the Group and approv

279、ed the acquisition of Interactive Technical Solutions by MCL.O We further developed our reporting on the long-term executive remuneration plan in this years Remuneration Committee report to reflect the feedback received from shareholders.O We continued to comply with the Quoted Companies Alliance Co

280、rporate Governance Code(the QCA Code)and have committed to applying the new 2023 QCA Code from 1 May 2024.O We were awarded the Small Cap Network Investor Relations Success Award 2024 for consistent and transparent communication with shareholders and the award for Dividend Hero of the Year.FURTHER I

281、NFORMATION IS AVAILABLE IN:STRATEGY,CORPORATE GOVERNANCE,BUSINESS MODEL AND SUSTAINABILITYSTAKEHOLDER ENGAGEMENTOur stakeholdersStakeholders are those groups likely to be affected by the actions of a company,or whose actions can affect the operation or business model of the company.The Board has ide

282、ntified the Groups key stakeholders and has taken the following steps to engage with them in order to inform the decisions that the Board takes about the products or services provided by the Group,its strategic direction,its relationship with its workforce and other relevant matters.Investor day Apr

283、il 2024Peter Lynas at Small Cap Awards collecting Dividend Hero of the Year AwardStrategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 28STAKEHOLDER ENGAGEMENT CONTINUED Our peopleWho engaged:Non-executive directors,executive directors,subsidiary managing directors

284、 and Group Head of HR.Key areas of interest:Safe working environments,development and progression,diversity and inclusion,competitive remuneration and workplace policies.How we engaged:O The Board visited all subsidiaries and the directors were able to tour the sites and engage with employees.O The

285、Board received monthly health and safety reports which included updates on safety incidents involving employees throughout the Group.O The directors and subsidiary managing directors attended the Cohort Business Excellence Awards to commend individuals for their achievements.O Board members contribu

286、ted to Q&A sessions held for the Leadership Development Programme.O The Board requested and received quarterly updates from the Group Head of HR to gain a better understanding of employee recruitment and retention,employee engagement and diversity and inclusion metrics across the Group.What we have

287、done:O We have developed our understanding of our employees environments and challenges,which has helped to influence our decision-making process.O We have supported the development of the cross-Group Leadership Development Programme to nurture leadership talent.The current programme commenced in Ma

288、y 2024 and has 17 participants from across the Cohort Group.O We have supported an increase in the total number of employees to 1,309(2023:1,132).O We have provided the Board with reports on employee recruitment and retention across the Group on a regular basis.O SEA,a member of UKNEST,promoting eng

289、ineering,science and technology in the naval sector,is selecting candidates to participate in the FutureNEST project,which provides personal development opportunities for apprentices,graduates and young professionals in the naval and maritime sectors,and develop innovation in defence capability.O SE

290、A invited graduates to visit key suppliers to provide exposure to manufacturing environment opportunities as part of their career development.O SEA held its first open recruitment event in November 2023 at the Barnstaple site giving prospective employees the opportunity to meet our experts and to gi

291、ve an insight into life at SEA.FURTHER INFORMATION IS AVAILABLE IN:SUSTAINABILITY Cohort BE Awards NROL TeamFutureNEST visit to Navy Command HQBoard meeting ELAC SONAR award winnersStrategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 29 CustomersWho engaged:Non-ex

292、ecutive directors,executive directors and subsidiary managing directors.Key areas of interest:Innovative solutions,product development,long-term relationships,value and product availability.How we engaged:O The Board received regular updates on key customers through the monthly reporting mechanism,i

293、n the presentations to the Board meetings by the subsidiary managing directors,and through input from the subsidiary managing directors into the strategy planning.O Members of the Board met with selected customers at the Cohort Group stand at the DSEI exhibition in London and at other events through

294、out the year.O A number of the non-executive directors worked directly with the project teams in our subsidiaries to support product development to satisfy customer requirements.O We appreciate that communication is a critical element of the product delivery process and our subsidiary management tea

295、ms actively engaged with the customer,often over long-term programmes of work.This fostered strong relationships with our key customers and enabled us to understand our customers initiatives and priorities.What we have done:O Through regular engagement and open communication with our customers,the C

296、ohort Group has established a clear understanding and a responsive service which we can align to our customers requirements;this is supported by our Group engagement principles endorsed by the Board.O The executive directors attended a number of each subsidiarys monthly management meetings and provi

297、ded support on engagement with customers.O We continued to develop and improve key performance indicators and processes to ensure customer delivery and needs remain a priority.O Chess developed a CGI-based video to promote its offering in the custom sector and also hosted a 30th anniversary celebrat

298、ion in June 2023.O MASS used customer feedback to build its brand narrative and promoted virtual learning by providing online training courses.FURTHER INFORMATION IS AVAILABLE IN:STRATEGY,BUSINESS MODEL AND SUSTAINABILITYSTAKEHOLDER ENGAGEMENT CONTINUED SuppliersWho engaged:Executive directors and s

299、ubsidiary managing directors.Key areas of interest:Ethical and social impact,payment practices and long-term partnerships to develop innovative products and solutions.How we engaged:O The Board received updates on relationships with key suppliers and strategic partners through the monthly reporting

300、mechanism and the year-end compliance reports.O Subsidiary management visited suppliers to develop the robustness of our supply chain,and to ensure quality and timeliness of delivery.O We engaged with our key suppliers to understand their businesses and governance arrangements as part of our due dil

301、igence process and at a number of trade exhibitions throughout the year including DSEI in London.What we have done:O To ensure that Cohorts business is conducted ethically,all suppliers need to comply with the principles of the Cohort policies on anti-bribery and anti-slavery.O The executive directo

302、rs attended a number of each subsidiarys monthly management meetings and provided support on engagement with key suppliers as required.O Subsidiaries worked with our suppliers to ensure the supply chain is robust.We are continually reviewing our supply chain and stock levels to ensure we have timely

303、 supplies for our needs.O SEA attended Make UK Defence Meet the Buyer event in Birmingham.FURTHER INFORMATION IS AVAILABLE IN:SUSTAINABILITYDSEI 2023Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 30 CommunitiesWho engaged:Non-executive directors,executive di

304、rectors and subsidiary management teams.Key areas of interest:Improving quality of life,environmental and social impact and diversity and inclusion.How we engaged:O We are committed to supporting the communities in which we operate and the Board received regular reporting on engagement by our busine

305、sses throughout the year.O Our businesses continued to engage with local schools and colleges supporting them in developing skills for industry,especially in STEM subjects.O Through supporting community schemes and charitable events which allow our businesses to leave a lasting positive impact.O We

306、engaged with our advisers and businesses to review our governance arrangements regarding climate-related risks.STAKEHOLDER ENGAGEMENT CONTINUEDWhat we have done:O We have supported communities and charities that have a link to our activities(often supporting military veterans or service men and wome

307、n)with financial donations and a matching scheme for employee funds raised,including SSAFA,and also charities and fundraisers local to our operations.O The Group hosted school visits and work experience in STEM subjects at some of our operations.O We reviewed,assessed and developed our climate-relat

308、ed risks and responses across the Group and set KPIs and metrics in alignment with the CFD recommendations.O MASS launched a partnership with Silverstone University Technical College to introduce a cyber security qualification.O SEA were proud to receive the Gold Award in the 2023 Ministry of Defenc

309、e Employer Recognition Scheme(Armed Forces Covenant),providing career opportunities for individuals transitioning from the military,recognising and accommodating the requirements of reservists and considering veterans for job positions based on their military qualifications.FURTHER INFORMATION IS AV

310、AILABLE IN:SUSTAINABILITY AND STRATEGIC REPORTGold Armed Forces Corporate Covenant Employer Recognition SchemeSupporting STEM events at Great Torrington SchoolStrategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 31SECTION 172(1)STATEMENT The directors confirm that

311、,throughout the year,in accordance with Section 172 of the Companies Act 2006,they have continued to act in such a way that they considered,in good faith,would be most likely to promote the success of the Company for the benefit of its members as a whole and,in doing so,have had regard(amongst other

312、 matters)to the matters set out below:Section 172 mattersHow the Board has had regard to these mattersPage reference O The likely consequences of any decision in the long termThe Board oversees the Groups strategy and recognises that their decisions regarding strategy will affect the Groups long-ter

313、m success.The Board closely monitors progress against strategic goals throughout the year both at Group and subsidiary level.The Board believes that the strategy will result in long-term success and increased value for all stakeholders.The Board also carefully considers the Groups commercial and ope

314、rational risks and how to protect shareholder value.MORE DETAILS OF HOW THE GROUP MANAGES RISK CAN BE FOUND IN THE RISK MANAGEMENT REPORT 49 O The interests of the Companys employeesThe Board recognises that our people are essential to our success and growth and the Board takes a keen interest in th

315、e development and retention of employees across the Group.The Board actively supports the leadership development programme and effective employee engagement initiatives.The Board visited each of the Groups subsidiary businesses during the year to better understand the businesses,their employees and

316、their culture and attended employee and management events.28 to 31 O The need to foster the Companys business relationships with suppliers,customers and othersWhile there are circumstances where the Board engages directly with certain stakeholder groups or on certain issues,the structure of the Grou

317、p means that engagement with suppliers and customers takes place most often at a subsidiary level.The Board supports the senior management teams at the subsidiaries to foster good relationships with their customers and suppliers and,if appropriate,will engage directly,usually through the executive d

318、irectors.The Board monitors the relationship with key customers and suppliers through the executive directors and the monthly reports from each subsidiary managing director.MORE DETAILS OF HOW THE BOARD ENGAGES WITH STAKEHOLDERS IS INCLUDED IN OUR STAKEHOLDER ENGAGEMENT REPORT 28 to 31 O The impact

319、of the Companys operations on the community and environmentThe Board recognises the importance of the impact of its decisions on the community and the environment.In accordance with the Group Environmental Policy endorsed by the Board,each subsidiary carefully manages its impact on the environment a

320、s further reported in our Sustainability report.Our subsidiaries engage with their local communities through a variety of mechanisms including charity events,equipment sponsorship for local teams sporting activities,providing work experience and university,school and college support.28 to 31 O The d

321、esirability of the Company maintaining a reputation for high standards of business conductThrough our Ethics Policy and our values,the Board sets out the values and standards of behaviour expected from all of its employees and representatives.This is supported by our governance and compliance framew

322、ork which requires compliance with the law in each jurisdiction where the Group operates and adherence to a wide range of Group policies and standards including comprehensive anti-bribery procedures and our whistleblowing policy.We integrate our values into our businesses and all of our interactions

323、 with our customers,partners and suppliers.Our Business Excellence Awards are based on the application of and demonstration of our values by our employees.28 to 31,34 to 41 O The need to act fairly as between stakeholders of the CompanyThe Board recognises that it has to balance competing interests

324、in reaching its decisions.Where there are conflicting interests,the Board will act as equitably and fairly as it is able to take into account the implication for each stakeholder.28 to 31How this works for the Cohort GroupThe structure of the Cohort Group means that day-to-day management decisions f

325、or our subsidiary businesses are undertaken by the senior management teams within the businesses within their levels of delegated authority.The Board has put in place and oversees a detailed governance and delegation structure.In particular,the Cohort Board oversees the activities and decisions of i

326、ts subsidiary businesses in the areas of strategy,finance,compliance,human resources,and commercial and risk management.Strategic reportGovernanceFinancial statementsCohort plc Annual Report and Accounts 2024 32SECTION 172(1)STATEMENT CONTINUEDPrincipal decisions made during the yearAs outlined abov

327、e,the Board engages with all of our stakeholders throughout the year and takes account of the feedback received,including,through the monthly reporting structure in place,feedback received by our subsidiaries direct when making its decisions and fulfilling its duties under S.172 of the Companies Act

328、 2006.Some of the key decisions considered by the Board are set out below:Principal decisions and stakeholders consideredBoards decision-making processLong-term considerationsAcquisitionsShareholders,operating companies,suppliers,our people,future customers and employees and professional advisersThr

329、oughout the year the Board considered information relating to a number of potential acquisitions taking into account the Group strategy as well as the impact on the various stakeholders of the Group including visits by Board members to several potential targets.In April 2024 the Board approved MCLs

330、acquisition of Interactive Technical Solutions Limited which completed in May 2024.The long-term benefit of the investment for shareholders and employees was considered by the Board.Material contractsShareholders,operating companies,customers,suppliers,our people,future employees and communityThe Bo

331、ard reviews and approves the terms of all material contracts entered into by the Group.The Board carefully considered the proposal made by SEA and Chess to the UK MOD to provide a Trainable Decoy Launcher.The Board considered the beneficial impact on winning this 135m contract on a range of stakehol

332、ders including shareholders,employees,suppliers and the local community in Barnstaple.The Board recognised that SEA will have to expand and train its workforce creating and safeguarding jobs.New site for ELAC SONARCustomers,suppliers,our people and communityThe directors monitored the progress of th

333、e building of the new site including a site visit in March 2024 and received regular updates from the management team on the expected timeframe and how this will impact upon employees,operational undertakings,customers and suppliers.The Board was keen that the new facility would be completed in accordance with the agreed timeframe and that the new site would be a flexible and energy efficient spac