Codan Ltd (ASX: CDA) shares are ending the week with an almighty bang.
In morning trade, the ASX 200 stock is up 24% to a record high of $39.20.
Why is this ASX 200 stock rocketing?
The catalyst for today’s move has been the release of an announcement from the metal detector and communications products manufacturer before the market open on Friday.
That announcement includes a trading update covering the half year period ended 31 December 2025. Though, management notes that all figures are preliminary, unaudited, and subject to review by the group’s auditors.
According to the release, Codan is expecting its group revenue for the first half of FY 2026 to be approximately $394 million. If this proves accurate, it will mean a sizeable increase of 29% over the prior corresponding period.
Based on this estimate, the ASX 200 stock believes that its underlying net profit after tax will be not less than $70 million for the half. This represents growth of approximately 52% over the prior corresponding period, and indicates that margins are improving meaningfully in FY 2026.
What were the drivers of this growth?
Management notes that its revenue and profit growth for the first half of FY 2026 were underpinned by “outstanding results achieved by the metal detection business and ongoing strong performance in the communications segment.”
The ASX 200 stock’s metal detection business delivered revenue of approximately $168 million for the half. This represents growth of ~46% over the prior corresponding period. The company advised that this growth was primarily achieved by gold detector sales in the African region. In addition, metal detector sales in other key rest of world recreational markets achieved double-digit growth for the half compared to the same period last year.
As for the communications segment, it achieved revenue of approximately $222 million for the six months. This represents growth of ~19% over the prior corresponding period. Management notes that this rate of growth is consistent with its “stated expectation of growth at the upper end of the 15% to 20% growth target range for the first-half of FY26.”
Following today’s move, this ASX 200 stock is now up almost 150% over the past 12 months from $15.94. This means that a $10,000 investment a year ago, would now be worth close to $25,000.
Codan intends to release its audited half year results for FY 2026 next month on 19 February.
The post Guess which ASX 200 stock is rocketing 24% on impressive half year profit update appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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