The Codan Limited (ASX: CDA) share price has been charging higher for a second day in a row.
In afternoon trade the technology company's shares were up 12% to $11.32.
This means the Codan share price is now up over 18% over the last two trading days.
Image source: Getty Images
Why is the Codan share price rocketing higher?
Investors have been scrambling to buy the company's shares this week following the release of its guidance for the first half of FY 2021.
According to the release, Codan has been experiencing very strong demand for its metal detectors from both the recreational and commercial markets.
This has been supported by the realisation of benefits from an expanding geographic spread, increased distribution into mass market retail channels, and an investment to increase manufacturing capacity.
It has also offset a particularly disappointing performance by Codan's Tactical Communications business. This business is expected to deliver a first half result significantly down on the prior corresponding period.
All in all, management is expecting Codan to deliver another record first half profit for the six months ending 31 December.
It has provided guidance for a net profit after tax of $40 million for the half. This is up by 33% from $30 million a year earlier.
What about the full year?
Management is refusing to get carried away with the first half performance and will not be providing guidance for the second half.
Particularly given how the second half is usually the stronger half for metal detector sales. It believes it is too early to determine if sales have been pulled forward and the traditional second-half weighting will materialise this year.
Though, one positive is that there is strong market anticipation about the launch of its new feature packed detector in the third quarter of FY 2021. In addition, it has advised that the Communications business will enter the second half with an order book in excess of $30 million.
It expects both to contribute to a strong full year result.
