Codan reports record FY11 profit

Shares in Codan Limited (ASX:CDA) surged 10.5% on Wednesday, after the company announced record profit for FY11.

The company, which designs and manufactures high frequency radio, satellite communications and metal detection products, reported a profit after tax for the year of $21.8 million. This compares to a $14.4 million profit in FY10.

But underlying profit fell back from the record $31.1 million recorded in FY10, to $23.4 million in FY11.

Revenue also declined from $189.3 million, but the $169.3 million result was enough to constitute the company's second best revenue performance.

Codan took a $5.3 million non-cash impairment write-down on its satellite products business, due to what the company said were “difficult” trading conditions resulting from the strong Australian dollar and the ongoing effects of consolidation in the industry.

But in an update to investors, the company said the fundamentals for both its metal detection and radio communications businesses “remain strong,” and that steps are being taken to turn around the satellite division.

The company has also taken hedge cover for the current year to limit the impact of the exchange rate.

CDA shares closed out Wednesday's trading at $1.210.