Chemring Group (CHG) H1 2026 earnings summary

Executive summary

• H1 2026 performance was in line with expectations, with revenue up 6.5% to £237.3m and a record order book of £1.4bn, up 8% year-over-year, providing strong visibility for future earnings.

• 91% of forecast 2026 revenue was either delivered or in the order book by April 30, supporting unchanged full-year expectations.

• Countermeasures & Energetics delivered strong growth, while Sensors & Information returned to revenue growth but faced margin pressure.

• Ongoing investments in capacity and capability, particularly in Energetics, to support future growth.

• Long-term outlook remains robust, supported by strong market positioning and a pipeline of growth opportunities.

Financial highlights

• Revenue grew 7% year-over-year to £237.3m; underlying operating profit declined 8% to £24.5m, with margin at 10.3%.

• Diluted EPS fell 8% to 6.1p; cash conversion dropped to 42% from 83% due to working capital investments.

• Interim dividend of 2.8p per share declared, up 4%.

• Net debt rose to £144.5m, with a net debt/EBITDA ratio of 1.47x.

• Operating cash inflow was £15.9m (42% of underlying EBITDA), reflecting inventory build for H2 deliveries.

Outlook and guidance

• Full-year 2026 guidance remains unchanged, supported by 91% order cover and expectations for 70% of operating profit in H2.

• Cash conversion for the full year expected at 80%-85%, with a much stronger H2 anticipated.

• Countermeasures & Energetics targeting low double-digit revenue growth; Sensors & Information aiming for mid double-digit growth, both with H2 weighting.

• Gross capex for 2026 expected at £120-140m, mainly focused on Norway expansion.

• Long-term growth underpinned by robust demand, differentiated technologies, and continued investment.