South Australia’s Codan Limited (ASX: CDA) this morning announced a deal with mining giant BHP Billiton Limited (ASX: BHP) and an improved FY18 profit guidance.
Codan manufactures and supplies equipment like metal detectors, tracking solutions and communications technology for defence and mining groups. It was founded in the late 50’s by three university friends.
In a public statement to the ASX, Codan said it expects to report a stronger second-half profit result. Strong metal detector sales and a contract with BHP were catalysts for the improved outlook.
Codan announced a contract to supply its underground mine tracking and fleet management system, Minetec, to BHP’s Olympic Dam mine in South Australia. The contract has a total value of $9.5 million, split evenly over Codan’s 2018 and 2019 financial years.
Codan said: “Assuming that metal detector sales continue to be strong and Minetec delivers product under the recently announced contract win with BHP, the Board expects underlying net profit after tax for the year ending 30 June 2018 to be in the region of $38 million.” The forecast compares to a net profit of $44.7 million in 2017.
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