Right, I think we've got most people now, so good morning everybody. Just a few bits of admin first. We're very pleased to welcome you to the full year results briefing from Cohort. This presentation is being recorded, so if you miss anything, don't worry, you'll be able to watch it again next week at your leisure. The slide deck that the management are talking to is available on the Cohort Investor Relations page, along with other useful materials. You can submit questions as we go along using the question button on Zoom, which we shall try to address after the presentation. It's great to have Andy and Simon back. I shall now pass over to Andy to start the presentation.
Thank you very much, Andy, and good morning to everybody. Yep, as Andy said, I'm Andrew Thomis, I'm Chief Executive at Cohort PLC and I'm here with Simon Walther, Cohort's Finance Director, to take you through our final results for the financial year ended in April 2025. I'm going to start off by giving you the highlights of the results we've announced. Simon will provide more detail, including a divisional breakdown. I will return with some comments about the demand picture and our future prospects. I'm happy to say that overall we have once again seen a very strong performance: record operating profit, record revenue, and a record closing order book. That's the result of hard work and development of the business over a long time. It's really pleasing to see that we're showing some real momentum. The numbers are on the screen now.
Revenue and profit were both up strongly. Revenue by 33%, adjusted operating profit by 30%. Adjusted earnings per share grew 27% ahead of external expectations and we significantly beat our expectations for net funds. It was another good period for new orders, which are of course the best leading indicator for future growth. Order intake of GBP 285 million significantly exceeded the revenue that we recognized. The total order book had grown to over GBP 616 million at the year end. If we aim off to take account of the one-off large order from the Royal Navy in 2024-25, order intake actually exceeded last year's. That order book covered 79% of our expected revenue for the year and it will be generating revenue for us well into the 2030s.
Operating cash flow was very strong, significantly exceeding profit and helping us to maintain our positive net cash position despite expenditure on two acquisitions and CapEx on a major new facility. Against that positive background, the board has declared a final dividend, subject of course to a shareholder vote at the AGM, of GBP 0.1105 and that results in a total dividend for the year of GBP 0.163 , once again representing an increase of 10% on last year's. If you can have the next slide, Andy, Simon will give a more detailed breakdown of the performance of our divisions. This slide shows the main factors behind the group's performance improvement. We saw good revenue growth in both divisions this year, especially communications and intelligence. As we'd expected, EID made a positive contribution with its newly strengthened order book.
MCL had a record year, successfully integrating its acquisition and managing an exceptional flow of urgent operational requirements with great skill and agility. Our most recent acquisition, EM Solutions, provided a maiden contribution to the group. In the final quarter, the integration has gone smoothly. We've established a new board for EM Solutions with two experienced local non-executives to provide local support for the management. MASS remained the largest single contributor to the group's profit, though it saw some competition from MCL and SEA this year. MASS's performance in terms of profit was a little behind last year with customer-driven delays on some large existing contracts and a slightly less positive revenue mix. Keith Norton has taken over as Managing Director from Chris Stanley, who retired, and he's focusing on improving business development and restoring MASS to a growth path.
In the Sensors and Effectors division, ELAC and SEA both contributed strongly to revenue growth. ELAC made good progress on its large contract to supply submarine sonars to the Italian navy, and we're now approaching the critical delivery phase on that contract. At SEA, we saw record levels of revenue and profit despite some problem projects that had an impact on margins. SEA announced the sale of its transport business at the beginning of the current financial year, and that's a strategic move to enable the management to focus on the core defense market. Chess had a more challenging year. It saw good growth in orders with strong demand for its portfolio of highly regarded products. We saw a recurrence of operational and delivery challenges that had a significant impact on profitability. Simon and I will be working closely with the business to overcome those this year. That's the big picture. Let me hand over to Simon, who will take you through the financial position in more detail.
Thank you, Andy, and good morning to you all. Looking first at the income statement, as already trialed, this was another record performance for Cohort and included initial contribution from EM Solutions. The underlying organic growth was strong. The net margin was slightly down from 10.4% last year to 10.2%. The main driver of this decline was the weak performance at Chess and the mix at SEA, both of which we expect to reverse in the coming year and beyond, with net margins expected to be above 11% in this coming year. I will explain the net margin elements in the next two slides. Move on.
Thank you.
Sensors and effectors delivered a significantly higher revenue, up by just over 20%. Within this, SEA achieved a record performance. The mix of work at SEA, especially continuing to deliver on an overseas contract at low margin, however, pulled its net margin back slightly. ELAC improved its revenue and moved its net margin into the low teens percentage despite still trading the large Italian contract at a low margin as it moves through its development stages. The main driver of the flat performance and the lower net margin was a much weaker performance of Chess, and this was due to delivery delays and incurring costs on closing older projects.
Looking forward, we're expecting the net margin in this division to move back towards 11% on relatively small revenue growth, the latter in part due to removal of around GBP 8 million per annum of the transport revenue on its sale in June of this year. The drivers of this improvement are better mix in SEA's defense business, Italy moving into production and delivery, and a recovery at Chess. Chess itself continues to see strong demand for its products, especially the counter-drone systems for ground-based air defense systems in NATO Europe. Turning to communications and intelligence, marked growth in revenue of 50% with a 65% increase in adjusted operating profit. The drivers of this were record performance by MCL, a level we expect to drop markedly back from. MASS was still our most profitable business, although its performance was slightly weaker than last year.
EID, after strong order intake, returned to profitability with more domestic orders to come. We expect a further improvement at EID and, more importantly, a steady next few years of gradually improving net margins. EM Solutions made an initial contribution with its highest net margin, helping to drive the division net margin close to 17% and above last year. Again, looking forward, a full year contribution from EM Solutions will drive higher revenue, and the net margin of this division is expected to move towards the higher teens percentage, helping push the group to hopefully over 11% in the coming year. Looking at the net funds for the group, the closing net funds were much stronger than we expected and was a result of very strong working capital management across the group, especially in sensors and effectors where SEA was able to successfully collect some older trading balances.
Looking forward, we do not expect such a strong operating cash performance this coming year, but we do expect net funds still to improve to be between GBP 10 million and GBP 15 million by April 2026. In terms of CapEx, we will complete the build of the new German facility in the early autumn, and we remain on track to begin occupying the new site from September this year onwards. Overall, a record year, exceeding expectations for both earnings per share and net funds. As we said earlier in our preliminary announcement of this week, adjusted 2025, 2026 earnings per share are now likely to be ahead of our previous expectations. Thank you. I'll hand back to Andy.
Thank you very much indeed, Simon. In this final section I'm going to talk about the outlook and I'll start with the broad market position. Then I'll talk about some of the investments that we're making in new products and technology to maximize our opportunities. I'll show you how our existing order book runs off over the coming years and then I'll round off with a summary of this morning's presentation. We are of course seeing a much stronger demand picture than we saw at the beginning of the decade. Unfortunately that's because the world is facing the most unstable and dangerous situation that we've seen since before 1989 and none of us should welcome that. The risks that we now see are real and concerning.
The U.K.'s recently issued National Security Strategy says that for the first time since the Cold War, we're entering a period with the potential for direct confrontation with our adversaries. The two main driving forces in demand for defense equipment have been the same since 2022. On the one hand, the continuing conflict in Ukraine, and on the other, the influence of growing Chinese defense investments and aggressiveness from the Indian Ocean right down to Australasia. The third factor, growing conflict in the Middle East, has been on a knife edge, occasionally exploding into violence with the potential for global consequences. The impact of those geopolitical factors on defense spending amongst the democratic nations has been magnified by the words and actions of the Trump administration. In the U.S., explicit demands for NATO nations to spend more have had their effect, as we saw at the recent summit.
The unmistakable message that the U.S.'s allies can no longer rely on what were, until recently we thought, ironclad commitments have had even greater force. The sequence of reversals in U.S. policy towards Ukraine, to take the most prominent example, has had a profound impact on Europe's sense of security and the results of that have been stark. According to the Stockholm International Peace Research Institute, worldwide defense spending grew by 9.4% last year. If you look at non-U.S. NATO, so that's Europe and Canada, that group of countries collectively grew defense spending by almost 20%, by 19.4% last year. On the other side of the world, Japan, facing the challenge of China, grew its defense spending by 21%, which was its largest annual increase since the early 1950s.
Australia and Southeast Asia also grew their defense spending in real terms, having already made increases in subsequent years of the recent past. The U.K., as you'll see, announced a commitment to spend 5% of national income on defense and security at the recent ASO summit. That increasing spend has manifested itself in demand for a range of different capabilities. We've recently seen that in the U.K.'s Strategic Defence Review, which identified priorities in the U.K. for defense capability investment, and many of those priorities are relevant to Cohort. For instance, the need for electronic warfare, drones, counter-drone capability, and communications in Ukraine is driving demand for our business MCL's products. The requirement for resilient land and air capabilities across NATO Europe emphasizes the importance of Chess's counter-UAV systems and MASS's airborne missile countermeasures.
The need to protect critical infrastructure from both cyber and kinetic threats generates opportunities for MASS and for Chess. The growth in manned and unmanned submarine and surface ship programs worldwide, not just in the U.K., is relevant to SEA, to ELAC, to EM Solutions, and to EID. Finally, the need to provide secure digital communications for multinational forces drives demand for new systems like EID's NATO-compliant TDCIS communication system for deployed headquarters and MASS's secure IT systems for higher-level communications amongst multinational forces. If we could have the next slide. Thanks, Andy. Moving to specifics, I mentioned that we continue to see good opportunities, and I wanted to share a few of those with you at ELAC. Earlier in the year, we received an order for the fourth of the four new Italian submarines, and that brought the total contract value to over GBP 100 million.
We're now starting discussions about two further possible boats at a slightly higher specification as well as upgrades to in-service vessels. If we look at EM Solutions, we see a promising list of opportunities in Australia, Europe, and East Asia, and EM Solutions will shortly begin deliveries covering almost the entirety of the Australian surface fleet. There is a lot more to come in the pipeline. MASS has just won a two-year extension to its long-term contract to design and run large-scale military exercises for the U.K.'s Strategic Command. As global tensions have increased, the drumbeat of those exercises has increased, and the need for more of them will undoubtedly arise. MASS also has a growing relationship with a multinational defense alliance, as I've mentioned, to provide secure digital communications.
MASS is starting a shakeup of its business development under its new Managing Director, aimed at improving its organic growth prospects. At MCL, of course, we see several large potential prospects from urgent operational requirements, most of which, I'm afraid, are too sensitive to go into any detail about. Moving on to the Sensors and Effectors division, Chess sees considerable short-term opportunities for its optical tracking systems for countering drones. It's got a very successful partnership with Rheinmetall and is looking to build others. At ELAC, earlier in the year, we received an order for the sonar suite for the fourth of the four new Italian submarines, a measure that brought the total contract value to over GBP 100 million.
At SEA, we see multiple opportunities for the Cratesense and Crate Array products arising out of the need for large-scale underwater surveillance, particularly in the North Atlantic, but not limited to that. SEA has a strong partnership with Terma, which is already bringing new opportunities for the important Ancilia missile protection system, which SEA is delivering to the United Kingdom and the Royal Navy. If we can move on, Andy, as demand grows, we're not only investing in new products, but also in the capacity to deliver. This slide shows the progress that we've made in the last year on ELAC's—I'm sorry, I've jumped ahead a slide. We haven't quite got to the progress of ELAC's new facility yet. Where are we?
You'll have to excuse me. Let's talk about the investment that we're making in R&D spend, which increased by 35% and is now over GBP 20 million in the last financial year. Here, what we're doing is looking at market trends and looking at where we can develop new products to be able to meet the evolving needs of our customers, which we see through new initiatives like the U.K. Strategic Defence Review. MASS, for example, has invested in a product called Thurbon CEMA, which combines cyber and electronic warfare data management for battlefield support. This is becoming increasingly important as we see the full panoply of electronic warfare and cyber techniques being deployed on the battlefield in Ukraine.
At Chess, we're investing in an integrated radar and electro-optical fire control system to combat naval threats from both drones and from surface unmanned vessels, which we've seen used to such devastating effect in Ukraine. The tightly integrated radar electro-optical capabilities that Chess is providing with this new radar from Rheinmetall will enable full 24-hour capability in adverse weather conditions to accurately track and deal with these threats at longer range than ever. At MCL last year, we saw some great experimental work together with partners for the Defence Science and Technology Laboratory, that MOD organization, to demonstrate the bomb disposal capabilities of autonomous robots. It turned out that Spot the dog, as you can see in the photograph there, was very capable indeed at dealing with those kinds of matters, particularly in complex environments involving locked doors, steps, etc.
It's much, much less dangerous than sending people to do those tasks. Finally, EID is investing in developments of its OceanX naval communications system, bringing in advanced new capabilities, in particular cybersecurity, which is becoming ever more important for long-range naval communications. If we can move on to the next slide, Andy. Here we do see the results of our investment in the new facility that we've been building for ELAC just outside Kiel. As well as providing improved accommodation for ELAC's engineers and scientists, that new facility is going to provide a flexible production space that will enhance the efficiency and flow of the company's very complex production, assembly, and test operations. That facility, as you can see in July, is nearing completion. That will be ready for ELAC to move in this autumn.
Alongside that important investment, we're also working to increase production capacity both at Chess and at SEA. Finally, in terms of capital allocation, and no less importantly, we maintain our strategy of seeking and investing in value-adding acquisitions. We're very selective, and we won't acquire a business unless we know it will add value and growth in the long term. Our most recent acquisitions of EM Solutions and ITS do meet that profile. If we can move on to the next slide, Andy, I've talked in broad terms about markets and capabilities, and this slide shows the tangible results of the demand picture that I've described. At over GBP 616 million, Cohort's year-end order book is the strongest that we've ever announced. That includes nearly GBP 230 million for delivery this year and almost GBP 150 million for delivery next year.
That's a result of order intake in the year well north of a quarter of a billion pounds, supplemented by the strong order book that we acquired with EM Solutions. The Royal Navy order for Ancilia at over GBP 135 million made a big contribution to the previous year's order intake. If we put that to one side, we did even better in 2024-2025. As I mentioned earlier, since the year end, the order book has continued to grow, and we now have 85% revenue cover for the year. The larger part of our order book, as you can see from the colors there, sits largely with the Sensors and Effectors division. SEA makes a very strong contribution to that number, and ELAC and Chess also add significantly to the total. Looking at Communications and Intelligence, since last year, we've seen almost a doubling of the order book.
The acquisition of EM Solutions was a major factor in that improvement, but EID, with its good order intake this year, also made a big contribution. For comparison purposes, the chart on the right shows the shape of the order book runoff as we saw it this time last year. What you can see is that in broad terms, it's maintained its shape, but it's grown substantially. In particular, the orders for execution and delivery in the current year and the immediate year following have grown really substantially. If you'd like to move on to the next slide, Andy. Yep, here we can see that in more detail. The order book runoff for the current year, together with a comparison against the same position last year.
The growth in a total order book from GBP 519 million to GBP 616 million, and that's a 19% increase, is a strong indicator overall of the potential for future growth. Since then, it's increased further. The two shaded columns here show the revenue already on order for the year ahead compared to the same position in 2024. Order cover in both divisions has improved, but it's most marked in communications and intelligence this year. That's the result of the EM Solutions acquisition, and as I've said on the improved order intake at EID, and that improvement, GBP 229 million this year compared to GBP 184 million in 2024, is almost 25%. That positions us well for further growth. Subsequent to the year end, that GBP 229 million increased to GBP 247 million. That brings me almost to the end of our presentation and a summary of the main points that I wanted to make.
Once again, it's been a record year in terms of performance, reflecting both the growing demand picture and also the agility and innovation that our business model is designed to optimize. As a result of our performance and our prospects, the Board has felt confident to increase the dividend by 10% once again. We've grown the dividend every year since our IPO in 2006. The results we've presented today already show some of the potential that arises from the EM Solutions acquisition and we expect the benefits of its strong order book and opportunity pipeline, together with the market access it brings, to be even more visible this year. We retain our strong balance sheet and an excellent relationship with our banks and that gives us the resource that we need to invest in new technology, greater production capacity and when opportunities arise, carefully targeted acquisitions.
Finally, we've once again achieved a record order book and we see an excellent pipeline of further opportunities ahead. The markets we're operating in are growing, as I've explained, and we expect to see those higher levels of spending maintained in the longer term. Achieving a book-to-bill ratio greater than one once again is the best quantitative marker for future growth. We maintain our revenue and profit growth expectations for the current year and expect our EPS actually to be a little better. Beyond that, we believe the combination of growing demand and our market position allows us to target further improvements in performance. I hope what you've heard today goes some way towards explaining why we hold that view.
In bringing the talk to a conclusion, I want to take the opportunity to mention the great contribution to our success made by our management teams and employees, particularly in the subsidiaries. We're very much a people business. It is their expertise, dynamism, practicality, and integrity that propel us forward. It's thanks to them that we've seen another step towards our exciting long term future as a major independent U.K. defense technology group, offering world class systems to domestic and export customers alike. Our strategy continues to be to generate growth both organically and through acquisitions, while paying a dividend that reflects our successful financial performance. We believe this offers the best long term returns for investors while creating high value employment and enhancing the security of the U.K. and its allies. Thank you very much for your attention. If you have some questions, we'd be delighted to try and answer them now.
Great, thank you very much gentlemen. Comprehensive presentation and congratulations on very strong progress in the year. Just a reminder to everybody, keep the questions coming through, of which we have many. Diving straight in, maybe for you Andy, you mentioned Ancilia as much as you are able to. Can you update us on potential international interest in Ancilia after the very large Royal Navy order last year? Added on another question, has your view on the scale of addressable market for such systems changed at all in recent months?
Yeah, I can say that through the partnership with Terma, we've been continuing to progress a number of opportunities for Ancilia and our view of the market potential has not changed at all. I mean, we regard it as a product which offers really considerable potential for exports. Now, what I would say there is that I don't expect those to start to be realized until we see the first Ancilia systems going into service with the Royal Navy. We're well down that path. We're through the critical design review for the product for the Royal Navy, but that's what we really want to focus on over the next year or so, to bring that successfully into service so the Navy can demonstrate it as the capable system that we know it's going to be.
That's going to be the catalyst to start seeing those really strong opportunities being turned into real orders. We expect to see that happen, but the focus for the time being is on delivering for the Royal Navy.
Understood, thank you, Simon, perhaps one for you. Geopolitical tensions are a great driver for demand for you, but have you experienced any supply chain delays regarding critical components due to shipping issues in the Middle East that have hovered the headlines lately?
No. I mean, like many companies, we experienced supply chain issues back in the post-COVID days, during COVID and post it. That basically sort of reset, really, the supply chain timetables. What often were days or weeks became months and even longer. They have come back a bit, but they've steadied now and we've not seen, you know, I'm not aware of any particular supply chain issues around the group whatsoever at the moment. No, it's not an issue. I think the Middle East, I think some shipping routes have already adjusted. It's like all these things, you get those slight bumps to it and then it settles down and everyone adapts. We've certainly not seen anything in the last year and I am not aware. None of my Finance Directors or operational people are bringing that issue to my attention.
If I can just downbreak that. We like to keep our supply chains as short as possible. Obviously, some have to be international, but we're lucky that in all our operating areas there's good local industry that supports us in the supply chain.
I would add that the German business, for example, I think 95% of its supply chain comes from within one hour of Kiel. If anything, that says more about the German industrial base than anything else, I think.
Their trains are more reliable than ours, Simon, that must be it. Right, moving back to the U.K., a couple of questions. In which U.K. service are you seeing the greatest number of opportunities at the moment?
In which U.K. service. As I've explained, the center of gravity of our business is maritime. Although we have some very important capabilities both on land and in the air, I think it's the maritime side of things which was definitely the best beneficiary of the Strategic Defence Review. That's not surprising given that the U.K.'s primary NATO task is the protection of the North Atlantic from Russian ships and submarines coming down through the Greenland, Iceland, and U.K. gap. It's the Royal Navy in the U.K., I think, where the best of our opportunities are visible. I'd cite, for instance, the work that's going into protecting the North Atlantic and detecting submarines coming through the North Atlantic, which was, I think, described as Atlantic bastion in the Strategic Defence Review.
We do certainly see opportunities coming in the other areas as well, and in the joint service area, which is true, for example, of the exercises that we run, which are fully joint deposit services.
Thank you. Not sure anybody could answer this one, but the Strategic Defence Review has offered a lot of encouragement and warm words. How confident can you be that, given the U.K.'s bank balance, all the commitments to spending will actually come to fruition?
I'll answer that in two ways. One thing that I would cite is the numbers that I mentioned in the presentation for what the actual increases in European, and for that matter, Japanese defense spending has been over the last year. There's a lot of talk about future spending and percentage of GDP and so on, but the reality is that spending has actually been increasing very rapidly, albeit in many cases in Europe, from a relatively low base. The reality of the risks to the U.K. really can't be ignored. As the Prime Minister himself acknowledged, the first responsibility of government is to the security and protection of its citizens. I'm really pleased that the government fully acknowledges and has recognized that and has been reflected in its statements both in the Strategic Defence Review and in the NATO summit. I think those are serious statements and we should take them seriously.
Thank you very much. A few questions on competition. There seems to be a structural decline in the U.S. dollar going on at the moment. Does that have competitive pricing implications for you if you find yourself in competition with producers over there?
It's quite rare. I mean, it does happen, but it's quite rare that we find ourselves in direct competition with U.S. primes. That's because the U.S. has a particular model of linking defense sales to its foreign policy and using a particular mechanism known as FMS, Foreign Military Sales, which are usually done on a government-to-government basis. I mean, we do occasionally see competition from U.S. primes, but it's not that frequent. Where it does happen, it's often on the U.K. or European subsidiaries of those U.S. primes, so they're more dependent on the local supplier base and the dollar price isn't so relevant. What I'd say about U.S. competition is that it does seem to us, and we are seeing a number of countries which would hitherto have naturally turned to the U.S. to meet their defense needs.
In part that's because of the quality of products, but also because they see U.S. foreign policy support as being an integral part of defense sales. I think with some of the changes in policy that we've seen coming from the U.S. administration, that inclines some of those customers to seek more diversity in supply and look towards Europe and the U.K. as suppliers as well.
Thank you. Slightly more generally on competition, when you do get involved in group tenders, do you find that you are still coming up against the same competitors as say a year ago?
Broadly, yes, I think so. I mean if the suggestion there is are we seeing some of the tech.
Bros coming into play?
Not so far is the answer. Not so far. Obviously, companies like Anduril have now set up a U.K. base. I would say that some of the new technologies that are coming out of the commercial and technology world have got a lot to offer in defense. I think we're likely to see the benefits of that coming through in cooperation between some of these new businesses coming in with a great deal of artificial intelligence knowledge, for example, and businesses which are used to operating in defense and understand how the end user operates and what the end user's needs are. I think that's going to be the best way to get the best out of those technologies. We're doing that, for example, with cooperation with companies like Helsing and Hadean.
Great couple of questions relating to some of the specialist businesses on MCL. We have a comment that the counter-UAV space is becoming, unsurprisingly, increasingly crowded. What do you think MCL's competitive edge is?
Really working closely with businesses and being very closely involved in the fast-moving measure versus countermeasure conflict as it develops in Ukraine at the moment, I think what we're seeing is very rapid responses to new threats as they evolve. For example, as a new UAV threat comes in, a way of countering that is developed either by electronic means or kinetic means, and the other side finds a way to overcome that countermeasure. Being in the thick of that, working with companies who move very fast to counter those threats, that's been really at the forefront of their success.
I would say just more broadly on that, with that measure and countermeasure conflict going on all the time in Chess, we have some products which we use to track UAVs optically, using very high-quality optical trackers which operate over long ranges and are coupled closely to Rheinmetall's 30 mm and 35 mm weapon systems, which can be trained to very accurately, with great precision, put an exploding projectile in the close vicinity of a UAV. There hasn't yet been a way developed to counter that 30 mm or 35 mm weapon, which is really pretty effective against both individual drones and groups of them.
Leading neatly on to Chess, could you just add a little bit of detail about what the delivery issues have been, and explain why you are so confident that these issues can be rapidly remedied?
What I said was that we'd be focusing very hard on resolving them. The issues have been disappointing this year. Last year we saw a really good recovery at Chess and we've had a recurrence of some issues that were occurring the year before. Those are things like supplier management. We've got good close relationships with the supply chain, but the quality of information provided to suppliers and relationship with them hasn't been strong enough this year. That's led to delays in supply, which in turn have led to customer delays. We've had issues of quality at Chess, really a result of not providing the training that was needed for production people. We've had some issues about performance as well at Chess, which are a little bit in relation to very ambitious targets that have been adopted at Chess and have needed some considerable additional engineering effort as a result.
Simon and I are going to be looking very closely at all of those issues. We already are, but we're going to continue to do so in the coming year and make sure we deliver better this year. That has been the big problem in the sensors and effectors area.
Great. Good luck with that, Simon. Maybe one for you. On investments, we have a question. Are there any particular areas, perhaps drones, AI, or cybersecurity, where you have increased your previous investment plans significantly and quite recently?
Andy touched on some of the programs that we're developing on our R&D. Of our development, our innovation, quite a bit, probably around 2/3 , is paid for by our customers who obviously then have a specific requirement. Where at the moment we are doing what we would call our own R&D, particular examples are EM Solutions, which is developing a new Satcom terminal that will sit between the two products it currently offers. It currently offers a Cobra, which is a 1 m diameter, and a 2 m plus diameter one called a King Cobra. There is a demand for one between them that they've called the Prince Cobra, which will hopefully come, and that is certainly needed by certain navies in the world, including the Japanese Navy, the Australian Navy, and the Royal Navy. In terms of the AI, we continue to work.
Chess has a business at Wokingham that has basically software engineers who have done the AI that is used for tracking drones that goes with their product that is sold into the Rheinmetall 30 mm, 35 mm caliber anti-drone system. We've already been working on AI, and MASS and EID are both continuing to work on developing their products. MASS is certainly, as Andy touched on, the EW environment is very important for us, and a lot of people are waking up to what it means. In some parts of the military, it's been seen as a bit of a Cinderella really, and they'd rather just have very nice looking tanks with fire things, but actually realize that if you can't communicate with your tanks, they're not much use.
We are seeing much more investment going into that area, and I think with MASS, we are one of the leading companies, certainly in the U.K. if not in the world, in developing some of these clever solutions. They will continue to work on that. Much of this is us working with customers to answer their needs, and in some areas where we feel there is that demand, like the Prince Cobra, we will lead ahead of the market and hope that, because obviously there's not much point us spending lots of R&D on something that nobody wants, we need to keep a balance. Overall, I think we've spent GBP 20 million, up 35% last year, on development across the group. I only see that going up.
Going forward on that positive note, leading on to, I suppose, you know, cross selling or the benefits of the broader group, we have a question. How many clients do you have that are working with two or more businesses within the Cohort group?
I can't off the top of my head give you a number. There are several though. I mean, good examples are, of course, Ancilia, which is a very important one, where Chess is a major supplier to SEA. I mean, we've got a very clear policy of where we look for partners. It's got to be the best partner and not the internal partner. I think the key point there is that it's much better to get, I don't know, 50% of something than 100% of nothing. What it's really got to be about is the best partner to win the contract and deliver the best solution for the customer. In the case of Ancilia, there was no doubt that Chess was the best partner.
There's no one really in the U.K. who's better capable of delivering a moving platform to rotate and elevate something like SEA's decoy launcher very, very accurately and stabilized on a moving platform. No problem there. There's plenty of other examples though. SEA and MCL have been working together, SEA and MASS have been working together, and it's gradually grown. That level of cooperation within the group and the way that we've approached it is really to improve the knowledge of our businesses about each other through regular meetings at high level and forums across the group, and to ensure that there is an atmosphere of trust through that knowledge, and that makes cooperation easier and simpler and more natural when it happens.
Yeah, that partly addresses the question we've had on EM Solutions and you mentioned it's been integrated very well so far, and the question was whether that was driven by central management arranging meetings for individual businesses to swap context and ideas, or are they all keen to meet up with the new boy and see how they can be mutually benefit planned.
Yeah, bringing EM Solutions into the group has had one unwelcome consequence, which is that when we have our meetings of all the Managing Directors, we now have to get up quite a lot earlier, but they played an active part in it. I mean, it is always going to be harder to interact with and run a business which is 12,000 mi away as opposed to one in Surrey. One of the things that we've done is to bring in two very experienced Non-Executive Directors onto the EM Solutions Board, based in Australia, to be able to provide local support and mentoring for the senior management there. In fact, all of the MD s will be going out to Australia, all except one in fact, in November for a group executive meeting which coincides with the very important Indo Pacific Exhibition in Sydney, which we'd all be exhibiting at.
We're making sure that those meetings take place and we're already getting cooperation between EM Solutions and SEA, looking at the U.K. market, and EM Solutions at EID, where EID is actually providing support for EM Solutions products in the Portuguese market.
Great, thank you. A couple of questions about your AIM listing, and they are along the lines of you've been able to raise capital when needed for M&A. Your shares now appear to be on a very healthy rating. Are you happy being on AIM, and is that something that the Board reviews on an annual basis?
It's something that the Board reviews and discusses regularly. I think at the time of the autumn budget last year, there were real concerns about the removal of business property relief from AIM shares. I think had that happened in its entirety, the calculus might have changed for us as to whether we stayed on AIM or went to the main market. There are factors on both sides, and the fact is that AIM worked extremely well for us last year. We were able to access the capital we needed. Our placing was significantly oversubscribed. From that point of view, having AIM as a place where we can raise capital, it works. Why would we want to change that?
The other benefits of a stock market listing: firstly, that it provides us with the ability to incentivize our senior management and provide share-based incentives on a whole workforce basis using some of the government's tax-advantaged schemes. Those are really good ways to engage our employees. As I've said, our employees, you know, we are a people business. We're not a business that has huge machines tending baked beans or something. The way we add value is really those great ideas that come from our scientists and technologists and that we turn into reality. Incentivizing them well is a really important part of recruiting and retaining the right people.
Finally, the listing brings us a degree of credibility both with our customers, who are assured by the listing that we are a professional and reputable business, and of course with our banks as well, who have a clear knowledge of what it means to be a listed business and are very well experienced in establishing good relationships with listed businesses. There's a lot of value to it. We'll keep it under review. We are quite large in the AIM context now, but the benefits of the relatively large and sensible regulation in AIM compared to one or two of the, perhaps, how can I put this, regulation requirements which are less well associated with successful businesses in the main market, is a significant, appealing factor to us.
We're in a global small cap index, which I think has made quite a difference to our liquidity on the AIM market as well. There's certainly no burning platform which we have to exit and go to the main market at the moment.
Great. Very comprehensive. In terms of the shares, we have a question. You paint a very exciting outlook, yet there were some direct sales this week of reasonable size, albeit the sellers still retain substantial exposure to Cohort shares. Without invading privacy, could you provide any color on this, and do you happen to know if any of those shares actually went to new institutional shareholders?
Yeah, I'm very happy to provide some color on this. I'm speaking personally for myself, and I think the same is true of my colleagues who also participated in the sale. I'm in my 60s and I'm enjoying life and I'm very happy to carry on doing this exciting job for as long as I can. I find myself in a situation where really the entirety of my personal wealth was bound up in Cohort shares. I am very confident that the business will continue to drive its share price forward, and indeed that we will continue to improve our performance, as I've outlined today. Just as I'm sure most of the people on the call today like to have a diversified portfolio, it made absolute sense for me to do the same. Now, having done that, still the large majority of my personal wealth is tied in Cohort shares.
That is a clear sign of my confidence in the future of the business and our ability to drive it forward. That's the background to the sale worth mentioning as well, as far as the timing is concerned. The sales were executed all together as a single package. The reason for that was that we wanted to do it at the moment of maximum transparency, which is to say just after we've released our results and told the market, really, as I've told you this morning, about everything that's going on in the business. I think that's very, very important if we are doing direct transactions. In answer to the question about whether any new institutions were brought in as a result of that, the answer is I just don't know.
It was managed by Investec who sold in the market, and so whether any of those particular shares went to new holders, I don't know. What I do know is that we're seeing a lot of new holders, really quite regularly, and there's a lot of interest in non holders in the business and I'm very pleased to see that.
Great, very transparent. I think I'm very conscious of time. We just have time for one more question. We've got to finish with Donald Trump, haven't we? The question is, a few weeks ago the Pentagon said that it was reviewing the Orcas agreement with the States, the U.K., and Australia. Do you regard this as just good management by a new government or is it something investors should be keeping a close eye on?
Yeah, I'm obviously not a government spokesman, but I do need to be a little bit diplomatic on some of these issues, I suppose. One important point is that Australia's need for nuclear submarines is really independent of what the U.S. wants to do. I don't think it's a secret in any way that the U.S. sees capacity constraints on its own ability to build new Virginia class submarines at the moment. I think that's why the U.S. wants to look at the commitment that it's made and whether it can still supply Virginia class submarines or whether there might be some kind of alternative solution. It is very much in the interests of the U.S. and in the interests of the U.K. as well as the interests of Australia that Australia does get that capability. I wouldn't like to speculate on how it's going to come out.
I will be mildly undiplomatic and admit to a little bit of disappointment, really in line with some of my comments earlier, that the U.S. would call into question commitments that have already been made because that doesn't do its international reputation any good. What I'd say in relation to the AUKUS submarines, because I mean the pillar one of AUKUS was initially to provide Virginia class submarines to Australia, but the longer term, the longer term approach was to provide new Anglo-Australian designs of nuclear submarine to be built both in Adelaide and in Barrow-in-Furness to the same design, and the need for the supply chain and to maintain the drumbeat of production of submarines, which is really important to be able to produce them efficiently, I think continues. I think the provision of those submarines isn't necessarily linked to whether the U.S.
can provide an early Virginia boat or not. That is speculation on my behalf. I think we'll have to wait and see what actually comes out of it.
Thank you for being slightly undiplomatic and insightful on that basis. Right, I think we'll conclude it then. Thank you very much to the audience for their questions. If we haven't been able to answer them all, we will try and do so later on and you will receive a feedback form, which the management are always very interested in if you can share your views. As mentioned before, this event has been recorded and, along with analysis of the results, will be publicly available next week. Of course, final thanks go to Simon and Andy . Congratulations on some really impressive growth in recent years. Keep up the good work and hopefully we'll be seeing you in a few months' time.
Thank you very much.
Thank you.