The Codan Limited (ASX: CDA) share price is in freefall on Monday after the company released an unflattering annual report in the morning.
Earlier in the morning, the stock was trading 10.2% down at $7.01. At the time of writing, the Codan share price has recovered a little and is now down 7.81% at $7.20. It had closed Friday at $7.81.
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What did the company report?
- Revenue down 10% to $456.5 million
- earnings before interest, taxes, depreciation and amortisation (EBITDA) down 38% to $116.8 million
- Profit after tax down 33% to $67.7 million
- Final dividend 9.5 cents brings 2023 total to 18.5 cents, down from 28 cents
What else happened in FY23?
The company blamed the poor annual result on the first half of the financial year.
The communications equipment business carried Codan, with revenue increasing 14% despite the company-wide loss. Profit margins in the division also went up to 25%, versus 21% in the 2022 financial year.
Codan reduced its debt from $61 million on 31 December to $52 million as at 30 June.
What did Codan's management say?
Codan chief executive Alf Ianniello said on Monday:
In the face of uncertain regional geopolitical and challenging global macroeconomic factors, Codan has delivered a stronger second half result. Minelab delivered stronger second half performance with newly released recreational detectors delivering exceptional results, driving FY23 Rest of World1 revenue growth and Communications achieved 14% revenue growth year on year.
The strong performance of both Tactical Communications and Zetron is most pleasing, they form an integral part of our overall strategy to improve the quality of our revenues and provide sustainable and profitable growth into the future.
What's next for Codan?
Codan management did not provide company-wide guidance numbers for the 2024 financial year.
It merely stated that the communications business is "targeting to deliver 10% to 15% revenue growth", Minelab's recreational market is "targeting high single-digit revenue growth", and that "regional geopolitical issues persist and global macroeconomic conditions remain uncertain".
A further update will be forthcoming at the annual general meeting on 25 October.
Ianniello said:
"We continue to execute against our strategy of building a stronger Codan, by investing in innovative new product releases, initiatives to grow in new and adjacent markets as well as ongoing geographical expansion, primarily within developed markets."
Codan share price snapshot
The Codan share price is almost back to where it was 12 months ago. It is trading more than 63% lower than its peak in June 2021.
The stock has delivered a 124.2% gain over the past five years.
