FOR
IMMEDIATE RELEASE
17 OCTOBER
2024
CHEMRING GROUP PLC
FY24
TRADING UPDATE
Chemring
Group PLC ("Chemring" or "the Group") today issues a scheduled
trading update for the period to 30 September 2024.
Current trading and
outlook
Trading in
the period has progressed as planned, with continued strong order
intake a notable highlight. The outturn for the year ending 31
October 2024 is in line with the current range of analyst
expectations*, despite current foreign exchange headwinds, and is
fully covered by orders.
The Group
has received a number of significant orders during the period. As
at 30 September 2024, order intake for the year to date was £638m
(30 September 2023: £604m) and the order book was £1,108m (30
September 2023: £869m). Order cover for expected FY25 revenue is
building well, with Countermeasures & Energetics having 95%
(2023: 87%) order cover of expected revenue and the shorter cycle
Sensors & Information sector having 47% (2023: 54%) cover. In
Countermeasures & Energetics order cover for expected FY26 and
FY27 revenues are currently 75% and 45% respectively, again
demonstrating the long-term nature of demand.
Countermeasures &
Energetics
Energetics
In
Energetics we continue to see increased levels of activity and
demand in the propellants and energetic materials markets as
customers re‐evaluate their operational usage and stockpile
requirements associated with traditional defence
capabilities.
Our
Norwegian business, Chemring Nobel, continues to work with a number
of its customers on establishing long-term supply agreements and is
expected to end the financial year with another record order book,
providing significant visibility over the medium term.
In March
2024 we announced that Chemring Nobel had been awarded grant
funding of c.£90m in support of its capacity expansion projects.
Chemring is pleased to confirm that detailed work packages have
been approved by the European Commission, and to date it has
received £19.5m. Further amounts are expected to be received
annually on completion of work packages.
On 10
October 2024 the Norwegian Government announced that, in
partnership with Chemring Nobel, it had launched a feasibility
study into the establishment of a new production facility to
further increase the production of military explosives, as they
view Chemring Nobel as the producer in Europe and North America
that can establish increased production the fastest. This co-funded
feasibility study, which is expected to be concluded by the end of
2024, will investigate the geographic location, infrastructure
requirements and environmental considerations of building a new
production facility. The study will also consider the role and the
levels of any financial contribution made by the Norwegian
Government.
In the US,
our Chicago business has received multiple orders in the period
including an order from the United Launch Alliance to develop
initiators and an order from Boeing in relation to the Harpoon
missile program, with the combined value of these two orders
totalling over $20m.
Our three
niche Energetics businesses, which design and manufacture high
precision engineered devices and specialist materials, continue to
see strong customer demand with order intake up 32% to £319m
(30
September 2023:
£242m). This strong performance demonstrates the value that our
customers place on Chemring's niche products and reinforces our
decision to invest in expanding capacity at our energetic
sites.
Countermeasures
In
Countermeasures we have continued to see robust customer demand as
we have maintained our position as a world leader in the design,
development and manufacture of advanced expendable countermeasures.
In the year to date the Group's countermeasures businesses received
orders totalling £172m (30 September 2023: £159m).
In the
period since 30 April 2024 our UK Countermeasures business ("CCM
UK") has seen strong order intake with notable awards including a
£36m order for Typhoon countermeasures, a £16m order from the UK
MOD, and a £8m order from MBDA USA for a new naval infra-red decoy.
This was the first US production order that CCM UK has received in
over 10 years and will contribute to the business having a record
order book at year end.
Contract awards - Sensors &
Information
Roke
In the
Sensors & Information sector our technology business, Roke, has
continued to make good progress with further contract wins in the
area of Electronic Warfare ("EW"). Orders totalling £10.5m were
received from Lithuania, Latvia and the UAE for the supply of
Roke's Resolve 3 man-portable EW system.
Roke's
expertise in the field of EW was further demonstrated in September
2024 when Roke was announced as one of four UK organisations to
have been selected for research funding in the first AUKUS
Innovation Challenge. The trilateral AUKUS Pillar 2 EW Challenge
called for proposals to identify electromagnetic spectrum
technology solutions to help give the AUKUS nations a strategic
edge in targeting and to provide protection against adversarial
electromagnetic-targeting capabilities.
US Sensors
In the US,
deliveries of systems under the Joint Biological Tactical Detection
System ("JBTDS") Low Rate Initial Production contract awarded in
September 2023 have all been completed, and we continue to make
good progress on the Enhanced Maritime Biological Detector ("EMBD")
Program of Record. On JBTDS we continue to support the customer as
they progress through testing and acceptance, with the expectation
of a Full Rate Production contract being awarded in
FY2026.
Full year results date
The results
for the year ending 31 October 2024 will be released on 17 December
2024.
Michael Ord, Chemring Group Chief
Executive, commented:
"The
business has continued to perform as expected, and with FY24
revenue fully covered by the order book, we remain on track
to deliver FY24
performance in line with the current range of analyst expectations
despite current foreign exchange headwinds.
The growth
in order intake demonstrates both our customer's needs to rebuild
their defence deterrent for the long term and their confidence in
Chemring to develop and supply highly effective solutions. These
awards strengthen our order cover over the near to medium term, and
position the Group well to meet our ambition to increase annual
revenue to c.£1bn by 2030."
-ENDS-
* The Group believes analyst
forecasts for adjusted operating profit for the year ended 31
October 2024 are in the range of £70.8m to £73.6m.
For
further information:
Rupert
Pittman Group Director of
Corporate Affairs,
01794 463401
Chemring Group
PLC
James McFarlane
MHP Group
07584
142665
Ollie
Hoare
07817
458804
Cautionary
statement
This announcement contains forward-looking statements
that are based on current expectations or beliefs, as well as
assumptions about future events. These forward-looking statements
can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements often use
words such as anticipate, target, expect, estimate, intend, plan,
goal, believe, will, may, should, would, could, is confident, or
other words of similar meaning. Undue reliance should not be placed
on any such statements because they speak only as at the date of
this document and, by their very nature, they are subject to known
and unknown risks and uncertainties and can be affected by other
factors that could cause actual results, and Chemring's plans and
objectives, to differ materially from those expressed or implied in
the forward-looking statements. There are a number of factors which
could cause actual results to differ materially from those
expressed or implied in forward-looking statements. Among the
factors that could cause actual results to differ materially from
those described in the forward-looking statements are: increased
competition, the loss of or damage to one or more key customer
relationships, changes to customer ordering patterns, delays in
obtaining customer approvals for engineering or price level
changes, the failure of one or more key suppliers, the outcome of
business or industry restructuring, the outcome of any litigation,
changes in economic conditions, currency fluctuations, changes in
interest and tax rates, changes in raw material or energy market
prices, changes in laws, regulations or regulatory policies,
developments in legal or public policy doctrines, technological
developments, the failure to retain key management, or the key
timing and success of future acquisition opportunities or major
investment projects. Chemring undertakes no obligation to revise or
update any forward-looking statement contained within this
announcement, regardless of whether those statements are affected
as a result of new information, future events or otherwise, save as
required by law and regulations.
Notes to editors
· Chemring is a
FTSE-250 listed global business that specialises in the manufacture
of high technology products and the provision of services to the
aerospace, defence and security markets
· Employing
approximately 2,600 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
www.chemring.com
