Half Year 2025 Chemring Group PLC Earnings Call Transcript
Key Points
- Chemring Group PLC (CMGMF) reported a record order intake of GBP488 million, a 42% increase from the previous year, leading to a GBP1.3 billion order book, the highest in the company's history.
- Revenue increased by 5%, driven by strong performance in the Countermeasures & Energetics segment, with operating profit up by 8% and earnings per share up by 3%.
- The company achieved a significant reduction in its total recordable injury frequency rate to 0.63, supporting its commitment to a proactive safety culture.
- Chemring Group PLC (CMGMF) maintained strong cash conversion at 80% and declared an interim dividend of 2.7p, up 4%.
- The company is on track to achieve its long-term goal of GBP1 billion in revenue by FY30, supported by enduring demand for its products and strategic agreements with major defense contractors like Diehl, SAAB, and Northrop Grumman.
- The Sensors & Information segment experienced a weaker period with revenue down 12% and operating profit down 26%, attributed to delays in U.K. government spending and the completion of JBTDS LRIP.
- There was a small exceptional charge related to Roke, and the company faced a minor FX headwind during the period.
- Roke's growth has slowed this year, and the company anticipates mid-teens margin targets are unlikely to be met in FY25.
- External factors such as potential budget timing disruptions in the U.S. and U.K., as well as significant FX movements, could impact near-term performance.
- The company faces a European-wide shortage of triple-based propellant, which is not currently part of its strategic roadmap, potentially limiting its ability to meet certain market demands.
Good morning, and welcome to the presentation of Chemring's interim results for the six months to April 30, 2025. I am, as usual, joined by our CFO, James Mortensen. I'll briefly cover some of the group highlights from our first half before handing over to James, who will take you through our financial and operational performance. I'll then comment on the general market environment and the progress we are making in delivering our incremental growth strategy, which is underpinned by our values of safety, excellence and innovation. We'll then take questions.
Our momentum from 2024 has been maintained into this year with the continued delivery of our long-stated goal of balancing near-term performance with longer-term growth and value creation. Across the first half, our operational and trading performance has been robust and in line with the expectations we set out in December, continuing to demonstrate the resilience and quality of the group. Our record order book and associated trading visibility underpins our
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