Chemring posts record order intake as countries respond to Russia, China threat

12th Dec 2023 07:35

(Sharecast News) - Defence and aerospace Chemring on Tuesday posted a strong rise in annual earnings amid a record order intake driven by strong demand for its countermeasures products as countries respond to "geopolitical turbulence".

The group said today it had booked £756m in orders for the 12 months to October 31, with the highest closing order book in a decade at £922m. Underling core earnings rose 14% to £88.5m on an 18% rise in revenue to £472.6m.

The dividend was lifted 21% to 6.9p a share.

Chemring added that it was investing £120m to boost manufacturing capacity which was expected to deliver £85m of incremental revenue by 2026/2027.

"The ongoing geopolitical turbulence has resulted in many countries re-appraising their defence and national security priorities, including increasing budgets, to specifically address the security challenges posed by Russia and China," the company said.

"Against this heightened threat environment, the role of multi-lateral organisations such as the North Atlantic Treaty Organisation (NATO) and the European Union is also becoming more significant."

It added that the war in Ukraine has specifically refocused attention "on the broad spectrum of defence capabilities".

"China's extensive military modernisation programme has in many cases, generated a requirement for increasingly cutting-edge solutions to protect against a continuum of threats."

"These range from long-range hypersonic missiles through to sub-threshold "grey-zone" activity, with the latter involving the extensive use of digital-based threats such as cyber-attacks and disinformation campaigns."

Reporting by Frank Prenesti for Sharecast.com