FY21 update – Trading expectations unchanged. Net cash of £2m (previously net debt of £5m) driven by timing benefits. Order intake benefited from a £25m contract awarded in March to SEA for the management and upgrade of in-service sonar equipment for the UK MoD, and significant contract awards at Chess, MASS and MCL. The Group’s closing order book grew substantially to c.£240m (2020: £183m), of which certain orders extend out to 2031. FY22 outlook – Despite FY order cover improving to 63% from 60%, delays in the placing of certain orders with EID is likely to negatively affect trading performance. While the overall performance of the Group’s other businesses means the Group’s revenue expectations are unchanged, the mix of revenues is expected to see a reduction in the Group’s overall margin. Estimate changes – We reflect the better FY21E cash outturn while reducing adj. (FD) EPS by 12% in FY22/23E, reflecting delayed orders and lower profitability at EID, slightly offset by strength in MASS, SEA, Chess and ELAC. EID – This business is a Portuguese based company that designs and manufactures advanced communications systems for naval and military customers. Cohort acquired a majority stake in June 2016. In FY20A, it generated a 17% operating profit margin on revenue of £18m. Valuation – The shares trade on a CY22E P/E of 18.2x, EV/EBITDA of 11.4x and FCF yield of 5.2%. While EID weakness is disappointing, the balance sheet is strong and management flag good prospects for significant new orders. Our SoTP-based 12m target falls to 690p from 700p. Next catalyst – Prelims are expected to be announced in late July.