Webcast

On 17 December 2024 we announced our Full Year Results.

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Press Release

Full Year Results for the six months to 31 October 2024

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Results Presentation

Results for the year ended 31 October 2024

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Annual Report

Annual Report and Accounts 2024

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Full Year Results 2024

Key achievements

  • 2024 was in line with the Board’s initial expectations despite H1 headwinds
    • Revenue growth of 8%, driven by strong performance at Roke, up 17%, and growth in our specialist energetic materials businesses, up 12%, offset by a weaker period for Countermeasures
    • Underlying operating profit margin of 13.9% (2023: 14.6%) primarily reflecting the impact of operational challenges at our Tennessee countermeasures business in the period
    • Improved cash conversion of 102% (2023: 90%) with continued focus on working capital
  • A record order book of £1,038m, the highest in Chemring’s history, providing excellent medium-term revenue coverage
  • Awarded c.£90m of grant funding to support capex investment to increase the capacity of our Norwegian site, amid unprecedented levels of demand for its products
  • Investment in our Energetics capacity expansion plan increased from £120m to £200m, excluding grant funding
  • Good progress made on capital projects to date, with c.£70m of capex spent in total during the period, and customers increasingly moving to long-term partnering agreements
  • Net debt was £52.8m (2023: £14.4m), given c.£70m investment in capex and a further £28.1m on the share buyback. Net debt to underlying EBITDA of 0.56 times (2023: 0.16 times) below internal target of <1.5 times
  • Proposed final dividend per share of 5.2p, up 13%, giving a total dividend of 7.8p (2.5 times cover)
  • The Board’s expectations for the Group’s 2025 performance remains in line with market expectations, with a similar H2 weighting. Approximately 77% (2023: 79%) of expected 2025 revenue is already covered by the order book, with unprecedented cover in Countermeasures & Energetics for 2026 and 2027 at 81% and 52% respectively

Group Chief Executive statement

“2024 was another year of positive performance for Chemring as we continued to see heightened activity and progress across the Group amidst growing demand for our products and services. Our teams delivered on expectations despite the operational headwinds that we experienced in the first half of the year. Changing customer spending priorities in the face of increased global uncertainty and competition have resulted in the order book being at its highest level in Chemring’s history, giving us a strong and sustainable platform for future growth.

The outlook for global defence markets is increasingly robust, with strong growth expected over the next decade. This growing visibility gives us the confidence to continue to invest for the future, balancing near-term performance with longer-term growth and value creation. Chemring is well placed to deliver on its many opportunities and we maintain our ambition to increase the Group’s annual revenue to c.£1bn by 2030.”

Current trading and outlook

Trading since the start of the current financial year is running to plan. The Board’s expectations for the Group’s 2025 performance remains in line with market expectations, with a similar weighting towards the second half.

The Group order book as at 31 October 2024 was £1,038m, of which £413m is currently expected to be recognised as revenue in 2025, giving 77% order cover, which provides excellent visibility for the full year. This leaves £625m of the order book to be delivered in 2026 and beyond, which provides approximately 81% of 2026 and 52% of 2027 expected revenue cover in Countermeasures & Energetics.

The Group’s longer-term growth prospects are strong, underpinned by robust activity levels, our leading technological offerings, the calibre of our people, high barriers to entry, and the investments we continue to make in our strong, high-quality business. With customers needing to re-equip and modernise their defence capabilities providing increased visibility, and with a robust strategy, the Group maintains its ambition to increase the Group’s annual revenue to c.£1bn by 2030.

The Board remains confident that Chemring will continue to deliver both robust organic and inorganic growth, balancing near-term performance with longer-term growth and value creation.