Chemring Group (LON:CHG) Posts Earnings Results

Chemring Group (LON:CHG) announced its earnings results on Tuesday. The company reported GBX 6.20 earnings per share (EPS) for the quarter, Digital Look Earnings reports. Chemring Group had a net margin of 9.69% and a return on equity of 13.12%. The company had revenue of £237.30 million during the quarter.

Here are the key takeaways from Chemring Group’s conference call:

• Chemring said first-half trading was in line with expectations, with revenue up 7% and the order book reaching a record GBP 1.4 billion, giving the company 91% cover for FY2026 revenue and leaving full-year guidance unchanged.
• Countermeasures & Energetics delivered a strong half, with revenue up 9% and operating profit up 32% as margins expanded to 18.4%, supported by strong demand and improved commercial terms.
• Sensors & Information returned to revenue growth, helped by a nearly 60% increase in order inflow, but margins were pressured by lower Roke utilization, early CORTEXA production, and more pass-through revenue.
• The company highlighted ongoing capacity expansion projects in Chicago, Scotland and Norway, all progressing on schedule or on budget, with management reiterating the target of GBP 100 million in revenue and GBP 30 million in operating profit from these sites by 2028.
• Cash conversion was weaker in H1 at 42% due to working capital investment and inventory build for second-half deliveries, but Chemring expects full-year cash conversion of 80% to 85% and net debt to rise further as investment continues.

Chemring Group Price Performance

Shares of LON:CHG opened at GBX 492.20 on Wednesday. The company has a debt-to-equity ratio of 40.39, a current ratio of 1.60 and a quick ratio of 0.71. Chemring Group has a 1-year low of GBX 446.52 and a 1-year high of GBX 614. The company has a market capitalization of £1.33 billion, a P/E ratio of 28.13, a P/E/G ratio of 1.99 and a beta of 0.82. The firm’s 50 day simple moving average is GBX 519.96 and its two-hundred day simple moving average is GBX 511.28.

Analysts Set New Price Targets

A number of brokerages have recently issued reports on CHG. Royal Bank Of Canada cut their price objective on shares of Chemring Group from GBX 600 to GBX 580 and set an “outperform” rating for the company in a research report on Wednesday. Deutsche Bank Aktiengesellschaft reaffirmed a “buy” rating and issued a GBX 650 target price on shares of Chemring Group in a report on Wednesday. Five investment analysts have rated the stock with a Buy rating, According to data from MarketBeat.com, Chemring Group currently has a consensus rating of “Buy” and an average target price of GBX 619.40.

Chemring Group Company Profile

We are a specialist manufacturing and technology business creating market-leading innovative solutions to meet our customers’ complex needs.

Using our extensive science and engineering expertise, we turn ideas into reality, designing and developing critical solutions that protect and safeguard in unpredictable environments in today’s increasingly unstable world.

We achieve this by innovating at every stage of the value chain, from research and development (“R&D”) through to design, manufacture and in-service support, working closely with our customers to deliver products, services and solutions for mission-critical success.

Our customer base spans national defence organisations, security and law enforcement agencies, as well as commercial markets such as space and transport.