CDA Hits ATH as Defence Demand and Earnings Surge

CDA is one of the strongest performers on the ASX in 2026, with record earnings growth, a defence communications franchise hitting margin milestones ahead of schedule, and a disciplined acquisition strategy building long-term competitive advantage.

Codan Limited (ASX: CDA)

Codan Limited (ASX: CDA) shares are up approximately 41% year to date in 2026 and have surged more than 130% over the past twelve months. The Adelaide-based technology company has long been known for its Minelab metal detection business, but its defence and communications division are now commanding the attention of the market. The company touched an all-time high of $44.520 in early May 2026, pushing its market capitalisation above $7.26B.

After upgrading FY26 earnings guidance to EBIT of approximately $235M and NPAT of approximately $170M, both up more than 60% on FY25.The Communications segment has reached a 30% profit margin in FY26, a full year ahead of the previously stated FY27 target and up from 26% in FY25. Revenue growth across Communications is tracking at the top end of the 15% to 20% guidance range, driven by sustained defence demand for software-defined radios and unmanned systems. Minelab revenue in the second half is tracking ahead of an already strong first half, supported by a high gold price and successful new product launches.
Adaptive Dynamics acquisition

Codan on 22 May 2026 announced a second strategic acquisition within the defence communications sector. DTC Communications, its US-based tactical radio subsidiary, entered into a binding agreement to acquire the intellectual property of Adaptive Dynamics, a US engineering company with over two decades of expertise in anti-jamming and interference mitigation technologies. The deal is valued at approximately $21M in upfront and contingent payments plus a tiered royalty structure over five years, funded from operating cash flow, with completion expected in the first half of FY27.

Adaptive Dynamics has developed advanced algorithms and radio frequency technologies to handle intentional and unintentional interference across land, maritime and airborne defence systems. Its capabilities also extend to Assured Positioning, Navigation and Timing, a discipline that has become critical as adversaries develop tools to disrupt GPS and conventional navigation. The acquisition positions DTC to compete for next-generation US and allied defence programs that now explicitly require electronic warfare resilience and AI-enabled communications integration. Management guided the deal to be earnings neutral in year one, with the focus on integration and capability uplift.

Outlook

Codan’s strategy is built on two durable growth engines. Its communications division is benefiting from a global defence spending upcycle, with NATO members committing to raise budgets and the US Department of Defense actively upgrading tactical communications with software-defined and AI-capable systems. DTC is well placed to capture this demand following the Adaptive Dynamics acquisition. Minelab continues to benefit from elevated gold prices and is expanding its addressable market beyond recreational prospecting into professional mining, demining and military applications. The company pays two fully franked dividends per year and management has expressed confidence in sustaining the current momentum into FY27 and beyond.

(Source: Company Report)