Chemring flags strong trading performance

17th Oct 2024 07:18

(Sharecast News) - Chemring reported a strong trading performance for the year-to-date on Thursday, with its full-year outlook remaining in line with analyst expectations despite foreign exchange headwinds.

The FTSE 250 company said it had secured significant orders, with an order intake of £638m as at 30 September, up from £604m a year earlier, and an order book standing at £1.1bn, compared to £869m at the same time last year.

In its countermeasures and energetics division, order cover for expected 2025 revenue had reached 95%, an improvement from 87% in 2023, with further strong cover into 2026 and 2027.

The board said the shorter cycle sensors and information sector had 47% revenue cover for 2025.

Within energetics, Chemring Nobel was expanding its capacity and securing long-term supply agreements.

Chemring Nobel had also been awarded £90m in grant funding for its expansion projects, with £19.5m received so far.

A feasibility study for a new military explosives facility was also underway in partnership with the Norwegian government.

In the US, Chemring's Chicago business had won multiple contracts worth over $20m, including from Boeing and United Launch Alliance.

The countermeasures business also experienced robust demand, with orders totalling £172m in the year to date.

Notable awards included a £36m order for Typhoon countermeasures and a £16m order from the UK Ministry of Defence.

In the sensors and information sector, Chemring said its Roke business had secured contracts worth £10.5m for its electronic warfare systems, including deals with Lithuania, Latvia, and the United Arab Emirates.

Roke was also selected for the AUKUS Innovation Challenge.

In the US, Chemring said it had completed deliveries under the Joint Biological Tactical Detection System contract, and was making progress on the Enhanced Maritime Biological Detector programme.

Chemring said it remained well-positioned for the future, with strong order intake and long-term demand providing significant visibility into the 2025 financial year and beyond.

"The business has continued to perform as expected, and with 2024 revenue fully covered by the order book, we remain on track to deliver 2024 performance in line with the current range of analyst expectations despite current foreign exchange headwinds," said group chief executive officer Michael Ord.

"The growth in order intake demonstrates both our customer's needs to rebuild their defence deterrent for the long term and their confidence in Chemring to develop and supply highly effective solutions.

"These awards strengthen our order cover over the near to medium term, and position the group well to meet our ambition to increase annual revenue to around £1bn by 2030."

Chemring said it would announce its results for the year ending 31 October on 17 December.

At 0803 BST, shares in Chemring Group were up 0.45% at 367.63p.

Reporting by Josh White for Sharecast.com.