Australia's Codan jumps to record high on robust forecast

Sept 29 (Reuters) - Australian electronics components maker Codan CDA.AX on Tuesday forecast a sharp rise in first-half profit and higher revenue for its communications division, sending its shares to a record high.

The company now expects group net profit after tax of at least A$160 million ($112.16 million) for the first half of fiscal 2027, more than double the A$71.2 million reported a year earlier, subject to final product mix and shipments.

The upgrade was driven by its communications business, which supplies equipment to defence, military and public-safety customers and accounted for more than half of group revenue in both FY25 and FY26.

Growing defence spending and heightened geopolitical tensions, including conflicts in the Middle East and Ukraine, have boosted demand for battlefield communications, electronic warfare and unmanned systems.

Codan now expects first-half communications revenue of A$400 million to A$410 million, compared with A$221.8 million a year earlier, and said about half of that revenue is likely to come from conflict regions.

"Demand from conflict regions is currently exceptionally strong, reflecting the proven performance and reliability of our technology in these contested environments," the company said in a statement.

Shares of the company rose as much as 21.5% to a record high of A$63.15 and were the best performer on the benchmark ASX 200 .AXJO, which was down 0.9%, as of 0351 GMT.

Codan's metal detection segment, Minelab, is also performing well, with sales run rates tracking slightly ahead of the second half of FY26, supported by sales of its GPZ8000 and Gold Monster 2000 devices alongside favourable gold prices.

The GPZ 8000 is Minelab's flagship gold detector, offering advanced performance in challenging ground conditions for finding small to large gold, while the Gold Monster is a fine-gold detector.

($1 = 1.4265 Australian dollars)