Record order book, full year expectations unchanged, strong long-term prospects
| |
As reported |
At H1 2024 exchange rates |
|
| |
H1 2025 |
Change |
H1 2025 |
Change |
H1 2024 |
| Continuing operations |
|
|
|
|
|
| Order book (£m) |
1,303.8 |
+25% |
1,327.9 |
+28% |
1,040.6 |
|
Order intake (£m) |
488.0 |
+42% |
496.6 |
+44% |
344.5 |
| Revenue (£m) |
234.3 |
+5% |
236.0 |
+6% |
223.4 |
| Underlying EBITDA*(£m) |
39.8 |
+12% |
40.4 |
+14% |
35.5 |
| Underlying operating profit* (£m) |
27.1 |
+8% |
27.5 |
+10% |
25.0 |
| Underlying profit before tax* (£m) |
24.1 |
+6% |
24.6 |
+8% |
22.7 |
| Underlying diluted earnings per share* (pence) |
6.8 |
+3% |
7.0 |
+6% |
6.6 |
| Statutory operating profit (£m) |
29.5 |
+69% |
29.9 |
+71% |
17.5 |
| Interim dividend per share (pence) |
2.7 |
+4% |
|
|
2.6 |
| Net debt at 30 April (£m) |
93.3 |
+24% |
93.6 |
+24% |
75.3 |
Key highlights
- Record H1 order intake of £488m and order book of £1,304m, the highest in Chemring's history, providing excellent medium-term revenue coverage
- H1 2025 was in line with the Board's expectations:
- Revenue growth of 5%, driven by strong performance within Countermeasures & Energetics, up 20.4%
- Underlying operating profit margin improving to 11.6% (H1 2024: 11.2%)
- Good progress made on organic growth projects to date, with £46.1m of capex spent in total during the period
- Net debt was £93.3m (H1 2024: £75.3m), with the increase as expected given the investment in growth capex. Net debt to underlying EBITDA of 0.95 times (H1 2024: 0.85 times)
- Interim dividend per share of 2.7p, up 4% (H1 2024: 2.6p)
- £3.3m deployed into the £40m share buyback programme announced on 26 February 2025
- The Board's expectations for 2025 are unchanged, with a similar H2 weighting of operating profit to last year (as previously guided). Approximately 85% (H1 2024: 96%) of expected 2025 revenue was delivered or in the order book at 30 April 2025
- The Group's longer-term growth prospects are strong, underpinned by robust customer demand for our market-leading products and services, high barriers to entry across our market segments, and a high quality pipeline of organic and inorganic growth opportunities
Michael Ord, Chemring Group Chief Executive, commented:
“Our 2024 momentum has continued into this year with another period of record order intake and an order book of over £1.3bn, increasing 2025 order cover to 85%. With this robust demand and trading environment the Board's expectations for the full year are unchanged.
“Operational and trading performance has been in line with our expectations, with improving returns for our shareholders underpinned by solid cash conversion. Both sectors benefitted from the receipt of several significant orders in the period, evidencing confidence in our market leading products and services.
“With growing geopolitical uncertainty resulting in increased defence expenditure, particularly across NATO, the Group is well positioned, with a strong and sustainable platform to increase revenue to £1bn by 2030.”
Notes:
* All profit and earnings per share figures in this news release relate to underlying business performance (as defined below) from continuing operations unless otherwise stated.
The principal Alternative Performance Measures ("APMs") presented are the underlying measures of earnings which exclude the amortisation of acquired intangibles, gain or loss on the movement on the fair value of derivative financial instruments, exceptional items and the associated tax impact of these. The directors believe that these APMs assist with the comparability of information between reporting periods as well as reflect the key performance indicators used within the business to measure performance. The term underlying is not defined under IFRS and may not be comparable with similarly titled measures used by other companies.
EBITDA is defined as operating profit before interest, tax, depreciation and amortisation. Reference to constant currency relates to the re-translation of H1 2025 financial information at the H1 2024 exchange rates to reflect the movement excluding the impact of foreign exchange. The exchange rates applied are disclosed in note 12.
A reconciliation of underlying measures to statutory measures is provided below:
Group – continuing operations: |
Underlying |
Non-underlying |
Statutory |
| EBITDA (£m) |
39.8 |
3.1 |
42.9 |
| Operating profit (£m) |
27.1 |
2.4 |
29.5 |
| Profit before tax (£m) |
24.1 |
2.4 |
26.5 |
| Tax charge on profit (£m) |
(5.2) |
(0.5) |
(5.7) |
| Profit after tax (£m) |
18.9 |
1.9 |
20.8 |
| Basic earnings per share (pence) |
7.0 |
0.7 |
7.7 |
| Diluted earnings per share (pence) |
6.8 |
0.7 |
7.5 |
| Group – discontinued operations: |
|
|
|
| (Loss)/profit after tax (£m) |
(0.3) |
(0.1) |
(0.4) |
| Segments - continuing operations: |
|
|
|
| Sensors & Information EBITDA (£m) |
19.5 |
(2.3) |
17.2 |
| Sensors & Information operating profit (£m) |
16.1 |
(2.6) |
13.5 |
| Countermeasures & Energetics EBITDA (£m) |
29.7 |
- |
29.7 |
| Countermeasures & Energetics operating profit (£m) |
20.4 |
(0.4) |
20.0 |
The adjustments comprise:
- amortisation of acquired intangibles of £0.7m (H1 2024: £1.0m, 2024: £2.0m)
- gain on the movement in the fair value of derivative financial instruments of £5.5m (H1 2024: £1.1m gain, 2024: £2.0m loss)
- exceptional items of £2.4m (H1 2024: £7.6m, 2024: £9.0m), comprising:
- acquisition expenses of £0.8m (H1 2024: £1.7m, 2024: £3.4m), relating to deferred consideration accounted for as a post-acquisition expense under IFRS 2 and professional fees incurred in relation to the Group's mergers and acquisition activity in the period
- expense of £0.1m (H1 2024: £5.0m, 2024: £7.5m) in relation to the ongoing costs incurred for the defined benefit pension buy-in process which will eventually conclude with a buy-out of the scheme
- costs relating to a restructuring within the S&I segment of £1.5m (H1 2024: £nil, 2024: £nil)
- tax impact of adjustments of £0.5m charge (H1 2024: £1.3m credit, 2024: £1.7m credit)
- discontinued operations in respect of the Explosive Hazard Detection ("EHD") business, net of tax, of £nil profit (H1 2024: £4.7m profit, 2024: £4.5m profit) an increase in disposal provision relating to a discontinued operation of £0.1m (H1 2024: £nil, 2024: £6.4m).
Further details are provided in note 3.
For further information:
|
Rupert Pittman
|
Group Director of Corporate Affairs, Chemring Group PLC
|
01794 463401
|
|
James McFarlane
|
MHP Group
|
07584 142665
|
|
Ollie Hoare
|
|
07817 458804
|
Cautionary statement
This announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Chemring's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are: increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approvals for engineering or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects. Chemring undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.
Notes to editors
- Chemring is a global business that specialises in the manufacture of high technology products and the provision of services to the defence, security and aerospace markets
- Employing approximately 2,700 people worldwide, and with production facilities in four countries, Chemring meets the needs of customers in more than fifty countries
- Chemring is organised under two strategic product segments: Sensors & Information and Countermeasures & Energetics
- Chemring has a diverse portfolio of products that deliver high reliability solutions to protect people, platforms, missions and information against constantly changing threats
- Operating in niche markets and with strong investment in research and development ("R&D"), Chemring has the agility to rapidly react to urgent customer needs
www.chemring.com
Analyst meeting
An analyst meeting will take place at 09.00 (UK time) on Tuesday 3 June 2025 at the offices of Investec Bank plc, 30 Gresham St, London EC2V 7QP. To confirm attendance please contact MHP Group: [email protected].
Presentation
The presentation slides and a live audio webcast of the presentation to analysts will be available at the Chemring Group results centre www.chemring.com/investors/results-centre at 09.00 (UK time) on Tuesday 3 June 2025.
Photography
Original high resolution photography is available to the media by contacting MHP Group: [email protected].
View the full press release in PDF format.