H1 summary: Revenue fell by 9% to £54m, but adj. EBIT grew 7% to £4.3m implying a 78% H2 weighting, in line with last year. There was an improved performance at MASS, which remains the main contributor to profit, and a return to profit at SEA, partially offset by weaker performances at Chess and MCL. H1 net debt was £6.1m, lower than expected due to timing of payments and receipts. Outlook in line: FY performance is expected to be in line with market expectations. Encouragingly, the order book has increased by 19% since April to £219m, from which 92% of FY21E revenue is covered. Prospects in H2 to further underpin this year and next are described as ‘good’. Estimates unchanged: We make no changes to estimates, but note improved order cover, upbeat tone and increased MoD funding. Furthermore, we believe our FY net debt forecast of £5m, in line with guidance and representing 0.2x EBITDA, has headroom to improve, but acknowledge Q4 can be lumpy. Latest addition: The acquisition of ELAC completed last week, enhancing Cohort’s maritime defence offering and outer year estimates by 2-3%. It represents strategic progress and was acquired cheaply. It had a headline price of €11.3m, representing 6x CY19 EBIT. We understand the business comes with a significant cash balance, but a defined benefit pension in deficit by €8.4m at 31 December 2019 and so, based on estimated CY20E EBIT of €1.0m, we calculate the business was acquired for a CY20E EV (incl. pension deficit)/EBIT of 9x. Upside should arise from synergies with SEA. Valuation: The shares trade on a CY21E P/E of 16.7x, EV/EBITDA of 10.9x and a FCF yield of 4.5%. We remain attracted to Cohort’s strong offerings within the defence market, improving order backlog and M&A potential. BUY.