Chemring Group (CHG) H2 2024 earnings summary

Executive summary

• Celebrated 50th anniversary as a listed company, achieving record order book of £1.04 billion, up 13% year-over-year, with 77% of 2025 revenue already covered.

• Revenue grew 8% to £510.4 million, with operating profit up 3% to £71.1 million and strong cash conversion at 102%.

• Focused on building a resilient business, balancing near-term performance with long-term growth, and investing in organic growth opportunities, especially in Energetics and Roke.

• Robust demand driven by geopolitical tensions and increased global defense spending.

Financial highlights

• Revenue: £510.4m (+8% year-over-year); Operating profit: £71.1m (+3%); Operating margin: 13.9%.

• Diluted EPS: 19.3p, down 4% due to higher tax and finance costs; cash conversion improved to 102%.

• Final dividend of 5.2p, total dividend up 13% to 7.8p.

• Net debt: £52.8m; Net debt/EBITDA: 0.56x; available liquidity of £157m.

• Adjusted operating profit excludes £18.5m impairment of Chemical Detection assets and other non-underlying items.

Outlook and guidance

• Targeting low double-digit growth in Energetics and mid-single-digit growth in Countermeasures for FY25; Sensors & Information expected to be flat.

• Operating profit phasing expected to be c.40:60 H1/H2, with mid-teens margin targeted in the medium term.

• Ambition to reach £1 billion in annual revenue by FY30, with detailed growth building blocks outlined.

• Near-term headwinds from US/UK budget timing and FX risk.