The Codan Limited (ASX: CDA) share price has been on form again on Tuesday and charged higher.
At one stage today the electronic products company's shares hit a record high of $12.96.
When the Codan share price reached that level, it stretched its year to date gain to a massive 78%.
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Why is the Codan share price at a record high?
Investors have been buying Codan shares this year after its very strong performance in FY 2020 and expectations for another strong 12 months ahead.
In August the company released its full year result and revealed a 29% increase in sales to a record of $348 million.
This was driven largely by strong metal detector demand due to a surge in the gold price over the last year after central banks across the world slashed interest rates.
Things were even better on the bottom line thanks to its improving margins. Codan reported a record statutory net profit after tax of $64 million. This was an increase of 40% over the prior corresponding period.
Codan's free cash flow was also very strong at $78 million, increasing its cash balance to $93 million.
How is FY 2021 going?
Although the company decided against providing guidance for FY 2021, it revealed that the new financial year had started strongly.
It noted that Minelab is expected to benefit from a full year of Vanquish sales and the release of a new gold detector. Whereas Minetec is expected to return to profitability.
Since then, last month the company announced a major new contract win. This contract is with a large African government to supply tactical communications equipment.
Codan advised that the contract has a value in the order of US$10 million and includes the supply of Sentry-HTM radios and accessories. It expects this order to be delivered in the second half of FY 2021.
What's next?
A further update is likely to be released at its annual general meeting in a couple of weeks. I would suggest investors keep an eye for that.
