Chemring Share Price Fell 1.76% on Upbeat Full-Year ’23 Results

The Chemring Group plc (LON: CHG) share price fell 1.76% after releasing its full-year results for the twelve months ended 31 October 2023. The company achieved a record order intake of £756 million, witnessing growth in both its primary segments, despite challenges posed by foreign exchange fluctuations.

In the Countermeasures & Energetics segment, order intake soared to £541 million, a remarkable 52% increase. This growth was primarily driven by robust demand in the company's specialized Energetics businesses, which saw a staggering 161% rise in order intake.

The Sensors & Information segment also performed well, with order intake reaching £215 million, up 10%, buoyed by Roke's effective implementation of its growth strategy.

The closing order book reached its highest point in over a decade, standing at £922 million. Roke, in particular, demonstrated impressive performance with a 45% increase in revenue to £160 million and a 9% rise in order intake to £183 million. Roke is well-positioned for continued growth in a thriving market.

Net debt increased to £14.4 million from £7.2 million in 2022. However, the company maintained robust operating cash generation with a cash conversion rate of 101% over a 36-month rolling period (2022: 108%). The net debt to underlying EBITDA ratio was 0.16 times, compared to 0.09 times in 2022.

The company has embarked on a £120 million capacity expansion plan, set to run until 2026. This plan aims to leverage the growing demand in the energetics market, expecting to generate additional revenue of £85 million annually from 2026/27.

In the fourth quarter, £9 million was invested into a £50 million share buyback programme announced on 1 August 2023. Additionally, a buy-in contract was entered with an insurer in late November 2023 for the company's defined benefit pension scheme, aiming to mitigate future funding risks.

The proposed final dividend per share stands at 4.6p, a 21% increase, leading to a total dividend of 6.9p (2.9 times cover). Looking ahead to 2024, the Board's expectations remain steady. Approximately 79% of the anticipated revenue for 2024 is secured by the current order book. 

Chemring share price. 

The Chemring share price fell 1.76% to trade at 321.25p from Monday’s closing price of 327.00p.