Chemring wins major contracts worth £278m

4th Nov 2024 07:19

(Sharecast News) - Chemring Group announced two major contract wins valued at a combined £278m on Monday, through its subsidiaries Chemring Nobel in Norway and Chemring Energetic Devices (CED) in the United States.

The FTSE 250 company said Chemring Nobel had secured a 12-year framework agreement with Diehl Defence, including an initial purchase order worth €231m.

It said the contract would support the production of 155mm munitions for the German Armed Forces and allies, with Chemring Nobel set to deliver MCX energetic material over a five-year period starting in late 2026.

Chemring Nobel was the sole qualified supplier of the material, integral to Nammo's munitions technology, which Diehl Defence and Nammo were collaborating on to fulfil German government orders.

In addition, Chemring's US subsidiary CED had been awarded a $106m contract to provide essential components for a classified U.S. missile program.

Deliveries for that contract would also start in 2026, spanning a five-year period.

Chemring confirmed its adjusted operating profit for the financial year ended 31 October was expected to align with market consensus at £70.9m.

"These significant contract wins illustrate the deep long-term relationships that we have built with our customers," said chief executive officer Michael Ord.

"It is further evidence of the sustained and growing demand for our products and supports our investment decisions to increase the capacity of our three energetics businesses, and reinforces Chemring's position as a key supplier to NATO."

At 0840 GMT, shares in Chemring Group were up 1.42% at 361.04p.

Reporting by Josh White for Sharecast.com.