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UK's Chemring FY26 adjusted EBIT slightly misses; to sell US Sensors business

By Reuters News


Overview

  • UK defence technology group's FY26 adjusted EBIT slightly missed analyst expectations

  • Company reported record £1.4 bln order book and multiple strategic contract wins

  • Initiated sale process for US Sensors business after strategic review


Outlook

  • Chemring expects strong year-on-year earnings growth in FY27, supported by its order book

  • Company says FY27 underlying operating profit to be more evenly weighted between H1 and H2

  • Capacity expansion projects in Energetics expected to drive growth from 2027 and 2028


Result Drivers

  • RECORD ORDER BOOK - Co said strong demand across core markets led to a record £1.4 bln order book at year-end

  • CONTRACT AWARDS DELAYS - Roke’s FY26 performance was below expectations due to delays in defence contract awards, mainly from UK MOD and international customers

  • SEGMENT PERFORMANCE - Countermeasures & Energetics segment performed strongly, while Roke saw record order intake despite contract delays


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

FY Adjusted EBIT

Slight Miss*

GBP 79 mln

GBP 79.64 mln (7 Analysts)

FY Net Debt

GBP 145 mln

*Applies to a deviation of less than 1%; not applicable for per-share numbers.


Analyst Coverage

  • The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 7 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the aerospace & defense peer group is "buy."

  • Wall Street's median 12-month price target for Chemring Group PLC is GBp650.00, about 23.6% above its November 11 closing price of GBp526.00

  • The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 25 three months ago


Reuters Recommended Reads

  • Nov 11 - Arms producer CSG cuts margin outlook on ammunition prices, shares slump

  • Nov 10 - UK's Avon Technologies FY26 adjusted profit beats estimates on strong demand, cost cuts

  • Nov 10 - Germany's Helsing to unveil AI-based military software as a rival to Palantir


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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