A small filing and a bigger question

Cohort, the Reading-based defence technology group in the FTSE AIM UK 50, published a director dealing notice at 14:47 on 3 November 2026. (LSE:CHRT) It disclosed that finance director Simon Walther exercised savings-related share Options over 1,665 shares at 387p on 2 November, taking his beneficial interest to 178,647 shares, or 0.38% of the issued capital. A total voting rights notice the previous afternoon put the share count at 47,290,935 as at 31 October.

The dealing is routine, as these options matured under an employee savings scheme granted in 2023. (LSE:CHRT) It does, however, offer a reason to look at the area the finance director oversees most directly: cash. On the LSE delayed price for the 3 November session, the shares stood at 1,362p, down 2.01%, which by our calculation values the group at about £644m.

Record profits, uneven cash

Cohort's preliminary results for the year to 30 April 2026, published on 15 July, showed Revenue up 13% to £306.4m and adjusted operating profit up 32% to £36.3m, with the adjusted Margin improving to 11.8%. (LSE:CHRT) Statutory profit before tax rose 27% to £32.6m, and the closing order book reached a record level.

Cash told a more uneven story. (LSE:CHRT) Net cash inflow from Operating Activities fell to £11.3m from £51.2m, because receivables rose by £49.8m. The company reported a working-capital outflow of £29.1m in the first half followed by an inflow of £43.7m in the second, citing in particular an Italian sonar project and a satellite communications programme for the Royal Australian Navy. Net funds closed at £2.2m, against net Debt of £32.5m at 31 October 2025.

Why the swings matter

Management expects this pattern to continue as the group takes larger contracts with bigger milestone payments. For investors, that means half-year cash figures may look weak or strong depending on contract timing rather than underlying trading. On our reading, it also makes the Balance Sheet Facility more important.

Just before its year end, Cohort renewed and tripled its banking facility to £175m, with a further £50m accordion option, and says it expects to pass covenants out to 31 July 2027 and beyond. Capital Expenditure was £18m in the year, including completion of a new ELAC SONAR facility in Germany.

Targets and the Dividend record

Over 2026/27 and the following two years, Cohort targets double-digit Earnings growth each year and expects to generate around £120m of Cash Flow before capital expenditure and dividends. The total dividend for 2025/26 was 17.9p, up 10%, with cash cover of 1.4 times by the company's measure, compared with 6.9 times a year earlier. The dividend has increased every year since the 2006 flotation. Based on that declared total and the 3 November price, the trailing Yield is roughly 1.3%, our calculation.

Risks to watch

The main risks are timing-related: delayed milestones could keep receivables elevated and push borrowing up between reporting dates. Defence Demand is supported, according to the company, by conflicts in Ukraine and the Middle East and rising NATO budgets, but government programmes can slip. Sensors and Effectors delivered flat revenue in 2025/26, with adjusted operating profit slightly lower, so that division's contribution to the margin target remains to be shown.

Next checkpoint

The first half of 2026/27 ended on 31 October 2026, the day the latest share count was struck. Interim results have not yet been dated in announcements reviewed, but they will show whether Working Capital has again built up during the half and how net funds or debt compare with the £32.5m net debt reported a year earlier. The closing order book of £618.8m covered 83% of consensus revenue for 2026/27, rising to 88% after subsequent contract wins, according to the July statement.