Latest news with #Chemring
Daily Mail
3 days ago
- Business
- Daily Mail
Chemring boasts record order book as global military spending swells
Chemring boasted record order intake and order book size in the first half as global defence spending continues to rise amid tensions in Europe and the Middle East. The aerospace and defence contractor on Tuesday revealed its order intake totalled £488million in the six months ending April, a 42 per cent annual increase. This contributed to the Hampshire-based company's order book growing by a quarter to £1.3billion, the highest in its history. Multi-year purchases helped Chemring's order intake soar by over two-thirds to £418million in its countermeasures and energetics segment. Its Scotland-based business secured a £23million deal to supply components used in the Next Generation Light Anti‐Tank Weapon system and an £11million deal from the Ministry of Defence for various air countermeasures. Chemring's Norwegian subsidiary, Chemring Nobel, also struck a £278million deal with Diehl Defence to provide MCX, a type of explosive material used in munitions. But overall revenues rose by just 5 per cent to £234.3million due to a weaker performance from its sensors and information segment. The FTSE 250 firm said the division's rate of new order placement had slowed amid delays by the UK Government in the publication of its strategic defence review. However, the group saw its total underlying operating profits expand by 8 per cent to £27.1million and kept its guidance for 2025 unchanged. Michael Ord, chief executive of Chemring, said: 'Both sectors benefitted from the receipt of several significant orders in the period, evidencing confidence in our market-leading products and services. 'With growing geopolitical uncertainty resulting in increased defence expenditure, particularly across NATO, the group is well positioned, with a strong and sustainable platform to increase revenue to £1billion by 2030.' Global military expenditure went up by 9.4 per cent to $2.7trillion last year, according to the Stockholm International Peace Research Institute, as wars raged in Ukraine and the Middle East, and concerns remained elevated over China's intentions towards Taiwan. Total spending by NATO member states grew to $1.5trillion, partly driven by European countries ramping up spending following pressure from US President Donald Trump for them to bear a greater share of the defence burden. British defence giants, such as BAE Systems, Babcock, and Chemring, have been major beneficiaries of this added spending, which has led to their share prices jumping considerably. Chemring Group shares were the FTSE 250's top riser on Tuesday morning, rising by 6.3 per cent to 517p, meaning they have leapt by approximately 58 per cent since the year began.
Reuters
3 days ago
- Business
- Reuters
UK's Chemring posts record order book on geopolitical risks
June 3 (Reuters) - British defence contractor Chemring (CHG.L), opens new tab posted its highest-ever order book and order intake on Tuesday for the six months ended April 30, driven by rising global defence spending amid heightened geopolitical tensions. The company, which also reported a half-year profit growth and reaffirmed its full-year expectations, said it anticipates steady demand for its air and naval products over the next decade. Chemring manufactures equipment such as sensors and countermeasures for naval and battlefield systems, among others. Demand for the company's specialised energetics capabilities - high-performance explosive materials and devices - has remained strong since Russia's invasion of Ukraine in 2022. The Ukraine-Russia war has driven a surge in demand for munitions and military technology, prompting governments to expand contracts with defence products suppliers. More recently, the British government pledged the largest sustained increase in defence spending since the end of the Cold War, expanding its fleet of attack submarines, which are nuclear-powered but carry conventional weapons. "With growing geopolitical uncertainty resulting in increased defence expenditure, particularly across NATO, the group is well positioned with a strong and sustainable platform to increase revenue to 1 billion pounds ($1.35 billion) by 2030", CEO Michael Ord said in a statement. The company reported an underlying operating profit of 27.1 million pounds for the six months ended April 30, growing 8% from the prior year, and said its order book totalled 1.30 billion pounds, a 25% increase. It reaffirmed its expectations for the year ending October 31. Analysts, on average, estimate 75.5 million pounds in underlying operating profit, according to a company-provided consensus. Shares in the Romsey-based company rose as much as 3.6% to 504 pence during morning trade, their highest level since July 2011. ($1 = 0.7393 pounds)
Daily Mail
4 days ago
- Business
- Daily Mail
Defence stocks soar on spending boost: Babcock leads the charge after Starmer announces plan to build more submarines
Defence stocks soared yesterday after Keir Starmer vowed to make the country 'battle-ready'. Although the Prime Minister refused to commit to a date for when defence spending will reach 3 per cent of GDP, his strategic review of the UK's military promised to build 12 nuclear-powered attack submarines. There are also plans for six munitions factories, a cyber unit to protect the UK against digital attacks and a £15billion investment in nuclear warheads. Shares in BAE Systems and Rolls-Royce, which build and power Royal Navy submarines, hit record highs, while Babcock, which services and maintains the fleet, jumped 8.2 per cent to levels last seen in 2016. Explosives and countermeasures specialist Chemring reached a 14-year high and defence robotics, surveillance and cyber security group Qinetiq gained 4.5 per cent. Loredana Muharremi, an equity analyst at US research giant Morningstar, said the spending plan 'is unequivocally positive' for UK defence stocks – though questions remain over how it will be funded amid fresh warnings of taxes rises. Britain and other European countries are racing to rebuild their military capabilities after US President Donald Trump said the Continent must take more responsibility for its own security – and called on nations to spend 5 per cent of GDP on defence. BAE shares are up 250 per cent since the start of 2022, when Russia invaded Ukraine, and Rolls-Royce has risen more than nine-fold since Tufan Erginbilgic took over as chief executive in January 2023 – giving it a value of about £73billion. Babcock shares have doubled this year alone. Launching his Strategic Defence Review in the shadow of Type 26 frigates being built at BAE's Govan shipyard in Glasgow, Starmer said 'the moment has arrived to transform how we defend ourselves'. The Government has pledged to increase defence spending from 2.3 per cent of GDP to 2.5 per cent by 2027 and has an 'ambition' – but no firm commitment – for it to rise to 3 per cent. Babcock was seen as a big winner from the plan to build a new fleet of submarines under Britain's AUKUS security partnership with the US and Australia. The Ministry of Defence also said the investment would 'see a major expansion of industrial capability' at BAE's submarine-building site in Barrow-in-Furness, Cumbria, and at Rolls-Royce's Raynesway nuclear reactor plant in Derbyshire. But the end of the so-called 'peace dividend' is a major headache for Chancellor Rachel Reeves as she struggles to meet her fiscal rules as well as rising UK gilt yields – pushing up Government borrowing costs. Institute for Fiscal Studies director Paul Johnson warned 'quite chunky tax increases' will be needed to pay for the extra spending. Former Bank of England chief economist Andy Haldane suggested Reeves will have to shred her fiscal rules to free-up cash for defence.
Yahoo
03-03-2025
- Business
- Yahoo
We won't let US buy up Britain's defence industry, says Starmer
The British defence industry will be protected from more US takeovers, Sir Keir Starmer has signalled, amid fears one of the country's key weapons manufacturers is about to fall into American hands. The Prime Minister vowed to 'put Britain first every step of the way' as he praised companies in the industry and said it was important to 'keep them British'. His comments suggest the UK may take a more muscular approach to defence takeovers than in the past – potentially risking a clash with the White House. Donald Trump's moves to force Ukraine into a peace deal and unpredictable brand of diplomacy have stoked fears in European capitals that the Continent can no longer rely on American support or equipment. There have been calls for independent rearming against the Russian threat from senior figures including Friedrich Merz, the new chancellor of Germany, who said last month that his top priority 'will be to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the USA'. It comes amid reports that US private equity firm Bain Capital has tabled a £1.1bn bid to buy Chemring. It makes crucial countermeasures to defend RAF and US Air Force jets against missiles, potentially adding to a long line of defence companies that have been snapped up by US firms. Speaking at an event in Downing Street, Sir Keir said it was vital that the Government's decision to lift defence spending to 2.5pc of GDP 'should be used to boost the British economy'. He said: 'We're really good at this in Britain. We're really good at creating things, making things. We're front of the game when it comes to AI and technology. We punch above our weight. 'We want to make sure that we stay in that position.' Asked if it was important to ensure companies such as Chemring remained British, Sir Keir said: 'Keep them British, absolutely. We're really proud of what we do.' John Healey, the Defence Secretary, added that the increase in defence spending highlighted a 'need to reinforce British industry, British innovation, British jobs, British business'. Mr Healey said: 'You see exactly the same concern from my counterpart Pete Hegseth, over in the US. You build up the deterrent strength and your war fighting strength of your forces by making sure that you've got a strong, innovative industry behind them.' Although the Government has the power to block defence takeovers on national security grounds, it generally waves US purchases through. In the past, supporters of such deals argued that the extremely close military ties between the two countries meant that American owners could be relied upon to act responsibly and did not pose a security threat. However, such claims are likely to come in for more criticism in the future given Britain's attempt to carve out strategic autonomy so it can act independently of the US if needed. Chemring, which has made weapons used in Ukraine's war against Russia, risks being an early test case. Shares in the business jumped last month amid rumours that Bain was ready to swoop on the FTSE 250 company . If a deal proceeds, Chemring would join a string of UK players that have fallen into American ownership. This includes Meggitt, which supplies key defence components for companies including Airbus and BAE Systems as well as Cobham, which played a key role in the 1982 Falklands War because of its pioneering air-to-air refuelling technology. Kwasi Kwarteng, the former business secretary, referred the proposed acquisition of Coventry-based Meggitt by Parker-Hannifin and Ultra Electronics by Cobham to regulators in 2021 over national security concerns. Both deals were ultimately approved. However, the Government introduced new rules in 2022 that technically give it more powers to quash deals amid rising concerns about the prospect of top-secret defence firms being in the hands of foreign owners. Sir Keir told Parliament on Monday that the Government wanted to 'fundamentally rebuild British industry' as he said that a £1.6bn missile deal for Ukraine would be supporting British jobs, skills and finance. However, he also insisted the so-called Special Relationship with the US was more important than ever. 'We must strengthen our relationship with America for our security, technology, trade and investment. They are and always will be indispensable,' the Prime Minister insisted. Sir Keir said earlier in the day that the UK 'punched above our weight' on defence. He said: 'We're investing in British pride, and I promise you this, we will step up together to lead the world on the challenges in this era, this Government will put Britain first every step of the way, the next generation of this country, the businesses that are the backbone of our economy.' Mr Healey added that extra defence spending would be used to produce more weapons for troops on the ground which he described as 'not good enough' at the moment. He said: 'What we want to do is draw that innovation into production and then get it into the hands of our war fighters. We've been good at the first, [but] we haven't made the bridge and we are poor at the second, not good enough. 'And we want to do better for our frontline forces, so the increase in defence spending will be better value for British taxpayers and better for British troops as well.' The Defence Secretary also hinted that investment rules could be relaxed further to pave the way for more UK spending in the private sector. Mr Healey added: 'That concern about investment funds and investment rules blocking defence firms - so called ESG [environmental, social, and governance]. The Chancellor and I are doing some joint work on that. We're assessing the barriers to investment into defence and security, and we'll make announcements on that later.' The Treasury took steps last year to confirm that investing in defence companies 'contributes to our national security' and 'is compatible with ESG considerations'. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
03-03-2025
- Business
- Telegraph
We won't let US buy up Britain's defence industry, says Starmer
The British defence industry will be protected from more US takeovers, Sir Keir Starmer has signalled, amid fears one of the country's key weapons manufacturers is about to fall into American hands. The Prime Minister vowed to 'put Britain first every step of the way' as he praised companies in the industry and said it was important to 'keep them British'. His comments suggest the UK may take a more muscular approach to defence takeovers than in the past – potentially risking a clash with the White House. Donald Trump's moves to force Ukraine into a peace deal and unpredictable brand of diplomacy have stoked fears in European capitals that the Continent can no longer rely on American support or equipment. There have been calls for independent rearming against the Russian threat from senior figures including Friedrich Merz, the new chancellor of Germany, who said last month that his top priority 'will be to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the USA'. It comes amid reports that US private equity firm Bain Capital has tabled a £1.1bn bid to buy Chemring. It makes crucial countermeasures to defend RAF and US Air Force jets against missiles, potentially adding to a long line of defence companies that have been snapped up by US firms. Speaking at an event in Downing Street, Sir Keir said it was vital that the Government's decision to lift defence spending to 2.5pc of GDP 'should be used to boost the British economy'. He said: 'We're really good at this in Britain. We're really good at creating things, making things. We're front of the game when it comes to AI and technology. We punch above our weight. 'We want to make sure that we stay in that position.'
