Chemring's growing Order Book, while profit expectations on course, shares 545p, Finals due in a month
- Mark Watson-Mitchell
- 1 day ago
- 2 min read
Mark Watson-Mitchell - 10.11.2025
The £1.54bn-capitalised Chemring Group (LON:CHG) has this morning announced that it expects its FY25 adjusted operating profit to be in line with analyst expectations.
The group has stated that it anticipates that its adjusted operating margin will be around 14.7%, driven by strong performance in its Energetics side, which offsets softness in the Sensors & Information division.
The company's net debt is projected to be around £95m, while noting that its Order Book has grown to £1.3bn by end-October, up from £1.0bn the previous year.
That growth was supported by significant contract wins including a $65m framework contract for aircrew flight equipment tester systems and a £24m order for rocket motors.
Alloy Surfaces will be reported as a discontinued operation as strategic options are assessed.
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
The Group continued to win significant orders.
Order cover for FY26 is building, with Countermeasures & Energetics having c.95% (97%) order cover of expected revenue and the shorter cycle Sensors & Information sector having c.47% (48%) cover.
The Business
· 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.
My View
The Group believes analyst forecasts for adjusted operating profit for the year to end-October inclusive of ASC are currently in the range of £73.3m to £77.4m, with a consensus of £75.8m.
I continue to believe that Chemring's portfolio of interests, predominantly aimed at the defence sector, should give it good cover over the foreseeable economic bumpy passages of progress.
Its shares at 545p are well below the analyst consensus market average Target Price of 616p, the highest being 670p while the lowest is just 530p.
Holders should remain confident that this group will prosper and so too will its shares.
(Profile 20.06.19 @ 177p set a Target Price of 300p*)
(Profile 20.10.23 @ 278p set a Target Price of 350p*)