Codan shares (ASX:CDA) has closed 12.4% higher today, pushing to a new ATH, and a test of the A$50 level following the FY26 report. Markets have responded with a firm vote of confidence to an across the board beat, with the guidance for FY27 critically also pointing to growth of 20%.
Looking at the data, revenue rose 30% to $875m, supported by 22% growth in Communications and a 42% increase in Metal Detection. Profitability showed a sharper increase, with EBITDA up 57% to $288.9m, and NPAT increasing 69% to $175.2m. Margins expanded materially across the business, while the fully franked FY26 dividend increased 70% to 48.5 cents per share.
The Communications print was notably strong, the order book increasing 50% to $380m, with defence customers accounting for 58% of that, up from 38% Y/Y. Unmanned systems revenue more than doubled to around $215m. The balance sheet also strengthened considerably, moving from $88.2m of net debt at December to $35.7m of net cash.
Importantly, management is targeting FY27 revenue growth of around 20%, implying revenue of roughly $1.05bn, significantly ahead of forecasts leading in. The company looks to be starting FY27 from a stronger earnings base, despite some supply chain risks.
Shifting Strengths A Valuation Boost
The rally appears to reflect a broader repricing of what kind of company Codan actually is. For years the Adelaide-based group was framed primarily as a metal detector maker with a communications side business. That framing has been dissolving steadily, and today’s move suggests it may be dissolving faster than the Street has modelled.
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The acquisition of the intellectual property of US firm Adaptive Dynamics, an anti-jamming and electronic-warfare-resilient communications specialist, for around A$21 million plus contingent payments, has helped reposition Codan’s DTC communications division as a credible participant in the contested electromagnetic environment that Western defence procurement is now prioritising. Markets appear to be grouping Codan alongside other ASX names exposed to defence hardware, AI applications, and space technology, a segment that commands a different valuation conversation than “metal detectors and radios.”
The Minelab side of the business adds a second narrative linked to gold exploration and miners. The combination of defence tech and gold linked hardware, gives Codan two different themes to help drive the stock. With gold back up testing $4500 on the day, alongside the strong FY26 print and guide, the tailwinds at Codan have been coming from multiple directions.
What Next For Codan
From a technical perspective, Codan’s share price sits above its 50-day average and the 50-day well above the 200-day, in a bullish setup. Today’s close at $48.88 is markedly above the prior all-time-high, and above the upper Bollinger band. This highlights the aggressive nature of the move that saw the first break of A$50, with an intraday high of A$50.24 in mid afternoon giving way into the close, with shares now 106.5% higher over the past 12 months.
The fundamental boost of a beat and raise report should take the fore in the sessions ahead, although there may be some who are looking for a retest of the previous A$45 resistance level, for confirmation signals of the shift to support. Whether momentum is enough for bulls to simply push on ahead, or whether there will be a pause for breath will be known in time, but for now at least, bulls can head into the final trading session of the week on course for a fourth consecutive week of gains.
