Record first-half results send Codan (ASX:CDA) shares 20% higher

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Record first-half results send Codan (ASX:CDA) shares 20% higher

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Codan’s shares, Codan 1HFY22 sales
Image source: © Andreyyalansky19 | Megapixl.com

Highlights

  • Codan shares surged as much as 20% to an intraday high of AU$10.05 on Tuesday.
  • The electronics products manufacturer said its first-half sales rose 32 per cent to AU$257 million.
  • Codan managed to deliver strong results despite the global shortages of electronic components and supply chain disruptions.

Codan Limited (ASX:CDA) shares surged as much as 20% to an intraday high of AU$10.05 as of 10:36 AM AEDT on Tuesday after the electronics products manufacturer said its first-half sales rose 32 per cent to AU$257 million. Also, its net profit is likely to jump 21 per cent to around AU$50 million, the company said.

Sharing updates for the first half ended 31 December 2021, Codan said it finished first half strongly and its profit would be a record first-half result. 

"The businesses acquired at the end of last financial year, DTC and Zetron, both exceeded our first half profit expectations," Codan said.

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Codan managed to deliver strong results despite the global shortages of electronic components and supply chain disruptions. According to today's announcement, Codan successfully maintained supply to its customers and increased its inventory holdings despite the global shortages of electronic components as well as global supply chain disruptions.

The company informed that its decision to invest in greater inventory levels positioned the group in a strong position at the beginning of the second half of FY22. Codan will provide further details concerning its first-half FY22 performance of the business and the outlook for the second half FY22 on 17 February 2022.

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Bottom Line:

The 1HFY22 results show that the company has successfully managed to tide over the challenges faced by the industry, leading to a rally in its shares price. Codan shares are down 21% in the last one-year time frame despite today's jump. Codan shares have been underperforming since June 2021 following its acquisition of Zetron and Domo Tactical Communications, which led to a total outflow of AU$173 million. 

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