Chemring Group – AGM Trading Update due this week, record Order Book, shares 519p, TP 670p

Mark Watson-Mitchell - 16.02.2026

This coming Friday morning, 20^th February, will see the £1.39bn-capitalised Chemring Group (LON:CHG) issue a Trading Update ahead of holding its AGM on that day.

The group focuses upon niche, high-margin markets with global reach and high barriers to entry – including advanced sensors, electronic warfare, cyber and energetic materials.

Those sectors benefit from resilient, long-term demand, underpinned by rising defence budgets, geopolitical tensions and the need to modernise and increase industrial capabilities across NATO and allied nations.

Its ‘sole source’ positions and technical barriers to entry underpin the strong customer loyalty and premium margins that it achieves.

The company’s Management has the strategic ambition to double group annual revenue to £1bn by 2030.

The Business

The Hampshire-based group is a specialist manufacturing and technology business with unique market positions at the heart of national security, defence and space sectors.

Its operations are organised into two sectors: Countermeasures & Energetics; and Sensors & Information.

With significant exposure to both short-cycle munitions rearmament and longer-cycle structural changes in defence technology requirements, Chemring is well placed to capitalise on growing European and US defence sector budgets.

Working with its customers globally, the group helps to protect their people, assets and nations, where agility, expertise and innovation are key to meeting their complex and evolving needs.

In its specific sectors, it enjoys market-leading positions, often being the sole source and qualified on a particular platform, with a wide range of governments and blue-chip companies around the world.

The group’s core competencies include:

• The manufacture of specialist materials and devices – military explosives, propellants and pyrotechnic actuators that are used in a wide variety of applications, from artillery rounds and strike missiles to aircrew escape systems and heavy launch space vehicles.

• Supporting UK intelligence and law enforcement agencies with operational mission support and active cyber defence.

• Advanced defence technologies including tactical electronic warfare, counter drone and digital battlefield command and control systems.

• Global leader in the manufacture and development of advanced countermeasures to protect air and naval platforms from the threat of missiles.

• Highly effective detection systems for the US military to counter the threat of biological warfare agents.

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The 2025 Finals

The group reported a resilient performance for the year to end-October 2025, with revenue increasing by 2% to £497.5m and underlying operating profit up 6% to £73.5m, driven by strong momentum in Countermeasures & Energetics.

The company achieved a record order book of £1,345.4m, up 32%, providing significant medium-term revenue visibility.

Underlying diluted earnings per share rose by 3% to 19.4p, and the company declared a dividend of 8.0p per share, a 3% increase.

Net debt stood at £89.0m, reflecting capital investment, while the outlook for 2026 remains unchanged with approximately 76% of expected revenue already covered by the Order Book.

Management Comment

When announcing the group’s Final Results in early December last year, CEO Michael Ord stated that:

"2025 has been another year of progress, delivering improved shareholder returns supported by strong margins and robust cash conversion.

This performance reflects our commitment to building a resilient, high-quality Group.

Momentum in Countermeasures & Energetics continued during the year, partially offset by short-term softness in Sensors & Information due to delays in UK Government spending.

Looking ahead, our record order book demonstrates that customer priorities remain aligned with Chemring's market-leading products and services.

The outlook for sustained defence spending remains strong.

Growing geopolitical uncertainty is driving increased expenditure across our target markets, particularly within NATO, and Chemring is well positioned to capitalise on this demand, which we expect to persist well into the next decade.

We have created a strong, sustainable platform for growth and remain committed to our ambition of doubling annual revenue to approximately £1 billion by 2030."

The Equity

There are some 272.12m shares in issue.

The larger holders include BlackRock Investment Management (7.76%), Albion River Management (7.00%), Invesco Asset Management (5.76%), Threadneedle Asset Management (5.19%), Jupiter Asset Management (5.18%), AXA Investment Managers (5.17%), JO Hambro Capital Management (5.14%), Aviva Investors Global Services (5.04%), Schroder Investment Management (5.03%) and Royal London Asset Management (5.03%).

Broker’s Views

Some five broking firms follow the group, four of whom call its shares as a Buy, while one suggests that they could Outperform.

The consensus average Target Price is 620p, with the Lowest at 590p and the Highest call at 670p.

Berenberg Bank has a Buy for the shares with a 670p Target Price, Jefferies have a Buy out with a 660p TP, Panmure Liberum has Buy with a 537p aim, while RBC Capital Markets go for 600p with their Outperform tag.

In My View

This group is displaying strong and expanding operating margins, excellent cash generation and it has a robust balance sheet.

Brokers are targeting mid-single-digit revenue growth in the near term, and then looking to accelerate to low-double-digit growth as the group’s new capacity comes online. 

Having followed this advanced technology products group for decades, I am not at all worried about the high price-to-earnings ratio of its shares – simply because this really is a cracking business, whose Order Book is growing at quite a pace. 

Come this Friday morning, we will see the AGM Update inform investors of the group’s ongoing progress – its shares now at 519p, after 533p earlier today, offer strong upside.

(Profile 20.06.19 @ 177p set a Target Price of 300p*)

(Profile 20.10.23 @ 278p set a Target Price of 350p*)

(Profile 04.12.25 @ 475p set a Target Price of 550p)

Still getting 'chaffed' about this group