Chemring Group (CHG) H2 2025 earnings summary

Executive summary

• Achieved resilient performance in FY 2025 with robust returns, excellent cash conversion, and a record order book driven by geopolitical factors and strategic investments for growth.

• On track to double annual revenue to approximately £1bn by 2030, with strong operational execution and mid-teen margins.

• Revenue increased 2% to £498 million, with operating margin improving to 14.8%.

• EPS rose 3% to 19.4p, and cash conversion reached 114%.

• Board declared a total dividend of 8p, up 3%.

Financial highlights

• Order book increased 32% year-over-year to £1,345m; order intake up 20% to £781 million.

• Group revenue up 2% year-over-year to £497.5m, operating profit up 6% to £73.5m, and operating margin up 50bps to 14.8%.

• Countermeasures and energetics revenue grew 17% to £322.7m, with operating profit up 37% to £61.6m and margin at 19.1%.

• Sensors and information revenue down 18% to £174.8m, operating profit down 25% to £31.2m, but margin held at 17.8%.

• Net debt at £89 million, leverage at 0.90x.

Outlook and guidance

• 76% of FY 2026 revenue already covered by orders; similar H2 weighting expected.

• Targeting low double-digit growth in countermeasures and energetics, mid-double-digit growth in sensors and information.

• CapEx for 2026 expected at £100–110 million, mainly due to higher Norway costs.

• Cash conversion expected at 80–85% in FY 2026, normalizing to 90–100% in the medium term.

• Long-term outlook robust, with a target to double revenue by 2030.