REG - Chemring Group PLC - Post-close and contract wins update

ChemringAnnouncement

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RNS Number : 7683G  Chemring Group PLC  10 November 2025

FOR IMMEDIATE RELEASE
 
                             10 NOVEMBER 2025

CHEMRING GROUP PLC

POST-CLOSE AND CONTRACT WINS UPDATE

 

Chemring Group PLC ("Chemring" or "the Group") today issues an update on its
FY25 financial performance and on order book progress with further contract
wins, as it enters its close period for the year ended 31 October 2025.

 

Key points:

·    FY25 adjusted operating profit in line with analyst expectations*

·    Robust growth outlook maintained

·    Order book of £1.3bn at 31 October 2025 (31 October 2024: £1.0bn)

·    Further significant contract wins during H2 FY25

·    Alloy Surfaces to be reported as a discontinued operation

 

FY25 year-end update

Chemring is pleased to announce that the adjusted operating profit for the
year ended 31 October 2025 is expected to be in-line with analyst
expectations* and adjusted EPS is expected to benefit from slightly lower
finance costs.

 

The Group's adjusted operating margin is expected to be c.14.7% (FY24: 14.2%)
with Energetics performance stronger than expected. We continue to see
increased levels of demand for propellants, energetic materials and
high-integrity devices, as customers re-evaluate operational usage and
stockpile requirements associated with traditional defence capabilities. This
has offset continued softness in Sensors & Information resulting primarily
from delayed UK Government order placement across both National Security and
Defence areas, which is a continuation of the trend we highlighted in our
interim results.

Net debt as at 31 October 2025 is expected to be c.£95m.

The Group also announces that we are assessing our strategic options for Alloy
Surfaces, one of our US countermeasures businesses, which will be reported as
discontinued in the FY25 results (see below).

 

Outlook

The Group continues to see robust market conditions, with increasing customer
demand for its technology-driven solutions and a resurgent demand for
traditional defence capabilities. This strong outlook is expected to be
maintained.

 

Order book and contract wins

At 31 October 2025 order intake for the year was c.£781m (31 October 2024:
£648m) and the order book was c.£1.3bn (31 October 2024: £1.0bn) as the
Group continues to win significant orders.

 

Order cover for FY26 is building, with Countermeasures & Energetics having
c.95% (31 October 2024: 97%) order cover of expected revenue and the shorter
cycle Sensors & Information sector having c.47% (31 October 2024: 48%)
cover.

 

Contract wins - Energetics

 

Our US subsidiary Chemring Energetic Devices ("CED") won a five-year $65m
sole-source framework contract, and base-year delivery orders valued at $38m,
for the production and repair of SCOT and JCAST aircrew flight equipment
tester systems. These tester systems are used by air forces worldwide, playing
a vital role in ensuring aircrew safety. Work under this framework contract
will be performed at CED's facility at Downers Grove, Illinois, and is
expected to be completed by June 2030.

 

In the UK, our Scotland-based business Chemring Energetics UK ("CEUK") won a
£24m order for the delivery of rocket motors and critical components used in
the Next Generation Light Anti‐Tank Weapon system ("NLAW"). Deliveries under
this contract will commence in 2027 and continue into 2028. This contract is a
follow-on to the £23m NLAW contract that CEUK won in February 2025, and
overall CEUK has won £90m in orders for the NLAW system since March 2023,
with further orders expected in the first half of 2026. Work under this
contract will be performed at CEUK's site at Ardeer, Scotland.

 

Our Norwegian business, Chemring Nobel, continues to see strong order intake,
including a £23m order from Nammo for the supply of various HMX products.
Work under this contract will be performed at Chemring Nobel's Saetre site,
with deliveries being made between 2027 and 2037.

 

Contract wins - Countermeasures

 

Our Australian Countermeasures business, Chemring Australia, won a US$35m
contract from the Commonwealth of Australia for the manufacture of airborne
countermeasures, with this work being performed at Chemring Australia's Lara
site and all deliveries should be completed by October 2027.

In the UK, Chemring Countermeasures UK ("CCM UK") won a £15m order from the
NATO Support and Procurement Agency ("NSPA") for the delivery of airborne
countermeasures for a European NATO member. Work under this contract will be
performed at CCM UK's site near Salisbury, with deliveries being made in FY28
and FY29.

Contract wins - Sensors & Information

 

Roke continues to win strategically important contracts and has a strong
opportunities pipeline underpinning longer-term growth goals, however the rate
of UK Government short-term order placement continues to be slower than usual.
During the second half Roke received more than £40m of National Security
contract renewals and its Defence business won a strategically important £20m
contract to deliver the next phase of Project ZODIAC for the British Army.
ZODIAC is the backbone of the Army's Land ISTAR Programme, and is delivering
an integrated intelligence, surveillance, target acquisition, and
reconnaissance ("ISTAR") system which will transform how the Army undertakes
data-led decision making to generate operational advantage.

Roke is the Prime Systems Integrator on this critical technology programme and
deliveries under this contract commenced in late FY25, with the majority
expected to be delivered in FY26. A follow-on contract is expected to take the
programme to late FY27.

 

Landguard Group acquisition

The Landguard Group acquisition completed on 29 August 2025. Landguard, based
in Fareham, Hampshire, designs, manufactures and supports software defined
radio systems and associated security products that enable defence, government
and law enforcement customers to protect crucial operational assets. The
acquisition creates further opportunities for Chemring to enhance and
accelerate growth of its Roke business whilst driving strong operational
synergies.

 

Strategic review of Alloy Surfaces Company

Over recent years the Group has seen a significant decrease in US Department
of Defense demand for the special material pyrophoric airborne decoys
manufactured by Alloy Surfaces Company ("ASC") in Philadelphia, and despite
significant effort we have been unable to secure sufficient orders to viably
sustain continuous manufacturing operations.

 

As such, the Group is considering its strategic options for this business,
which will be presented as a discontinued operation in the FY25 report and
accounts. The options include a sale of the business or assets.

 

Directorate change

Fiona MacAulay, Senior Independent Director, has informed the Board that she
will not be seeking re-election at the Group's Annual General Meeting in
February 2026. Fiona's second three-year term as a non-executive director
would otherwise have expired on 2 June 2026. The Chairman and the Board of
Directors wish to extend their thanks to Fiona for her considerable
contribution to the Group. A process to identify a suitable candidate to
replace her will now be instigated.

 

Full year results date

Results for the year ending 31 October 2025 will be released on 9 December
2025.

 

-ENDS-

 

*On a continuing operations basis, when adjusted for ASC which will now be
accounted for as a discontinued operation. The Group believes analyst
forecasts for adjusted operating profit for the year ended 31 October 2025
inclusive of ASC are currently in the range of £73.3m to £77.4m, with a
consensus of £75.8m. Annual normalised revenue for ASC would have been
c.£25m and its operating profit c.£3.5m. However, given actions taken as
part of the strategic review during the year, ASC is expected to report a loss
of c.£3m as part of discontinued operations and the FY25 results will also
include several one-off costs, of which c.£5m are expected to be cash
related.

 

 

For further information:

Rupert Pittman           Group Director of Corporate Affairs,
         01794 463401

                                      Chemring Group
PLC

 

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 FTSE-250 listed 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 (http://www.chemring.com)

 

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