Codan shares (ASX: CDA) briefly touched a record high before pulling back to test the psychologically significant A$50 level to start the week. The Codan share price began the week with a burst of momentum, printing a new all-time high of A$51.76 before profit-taking saw the stock settle at A$50.02, down 0.16% on the day.
The intraday reversal from record territory is a textbook technical pattern following a sustained multi-month rally, with A$50 now emerging as a key short-term support level for markets to monitor. Despite the modest daily pullback, bulls remain firmly in charge, with Codan up 72% year-to-date, a performance that dwarfs the flat return of the S&P/ASX 200 over the same period and places the stock firmly among the ASX’s top stocks of the year.
Driving Codan Shares To New Highs
Codan’s rally has been supported by FY26 results that delivered a clear beat against analyst consensus and the company’s own prior guidance. Group revenue climbed 30% year-on-year to A$874.97 million, while Net Profit After Tax surged 69% to A$175.18 million, reflecting both top-line momentum and meaningful operating leverage across the business.
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The strength of cash generation was equally notable, as Codan shifted from a net debt position of A$88.2 million in the second half of 2025 to a net cash position of A$35.7 million by year-end, a significant balance sheet improvement that gives management flexibility for further capital deployment. The board responded to the earnings strength by lifting the full-year dividend 70% to 48.5 cents per share, including a fully franked final dividend of 29.0 cents per share.
Defence Communications
The most consequential development has been the transformation of its Communications segment into a high-margin defence technology business. The segment generated record full-year revenue of A$506.2 million, a 22% increase on the prior year, while segment profit jumped 45% to A$156 million.
Segment profit margins reached 31%, a figure that is particularly significant because it represents the achievement of the company’s own long-term FY27 margin target, arrived at 18 months ahead of schedule.
Revenue from defence customers rose to 58% of total Communications sales, up sharply from 38% in FY25, as global defence budgets expanded and demand for sovereign military hardware intensified. Within that, revenue from unmanned radio systems more than doubled to A$215 million, reflecting the rapid proliferation of drone and unmanned platform technology across Western armed forces.
Minelab Delivers Record Gold Revenue
Codan’s consumer and professional metal detection division, Minelab, contributed materially to the group’s earnings beat. The segment generated A$362 million in revenue, a 42% increase year-on-year, with segment profit rising 65%. Management described the performance as exceptional, and the numbers support that characterisation.
Minelab benefited from a direct macro tailwind in elevated gold prices, which drove demand from both artisanal miners across Africa and other emerging markets and recreational users in developed markets. The product pipeline also contributed, with the flagship GPZ8000 gold detector, the Gold Monster 2000, and expanded countermine solutions all supporting revenue growth.
What Lay Ahead?
The technical setup suggests A$50 is the immediate support level to watch, with a failure to hold potentially seeing the stock retrace toward the A$45 level that had previously acted as resistance. Codan’s record-breaking run to A$51.76 and its subsequent test of A$50 is indicative of a stock trading at a premium, with some profit taking allowing technicals to cool off whilst markets test the breakout.
Bull Case:
- Defence revenue mix rising to 58% signals durable, high-margin structural growth
- FY27 margin target beaten 18 months early, demonstrating strong operating leverage
- Contracted order book up 50% to A$380 million provides strong earnings visibility
- Net cash balance sheet supports further M&A without dilutive equity raises
- Bell Potter price target of A$54 implies meaningful upside from current levels
Bear Case:
- Record high valuation leaves little margin for error on FY27 guidance delivery
- Defence contract lumpiness may drive volatile quarter-on-quarter revenue swings
- Minelab growth remains exposed to gold price cyclicality and consumer sentiment shifts
- Adaptive Dynamics integration carries cross-border execution and R&D capitalisation risk
