Chemring flags slower start to FY26, non‑cash impairment at Kilgore Flares

(Sharecast News) - Aerospace and defence firm Chemring shares slipped in early trading on Friday after it reported a slower‑than‑expected start to the year, flagged operational disruption in its countermeasures division and warned that net debt would rise as investment ramps up. Chemring said FY26 trading remained in line with board expectations, with another second‑half weighting, but noted that early‑year performance had been held back by production issues in countermeasures. Chemring added that the problems were now largely resolved.

At its Kilgore Flares site in Tennessee, its automated facility continued to improve, prompting the retirement of several legacy operations - a move expected to trigger a non‑cash impairment charge.

In the UK, Chemring said delays to the Defence Investment Plan had continued to affect the market, but noted order intake had since improved and the medium‑term backdrop for defence spending remained supportive.

Investment to expand Energetics capacity was said to be progressing, funded through existing debt facilities, meaning Chemring now expects net debt to trend higher through the year.

Chemring also noted that the Norwegian government's feasibility study into a second explosives facility had moved into its concept‑selection phase, backed by up to £16m of funding and due to conclude by end‑2026.

Looking ahead, Chemring's order book stood at £1.36bn as of 30 January, slightly ahead of last year, with FY26 revenue now 85% covered. Order intake since 31 October totalled £122m against a strong prior‑year comparator.

Chief executive Michael Ord said: "Chemring is well positioned to benefit from rising defence spending across NATO and allied nations, evidenced by our record order book and a strong pipeline of opportunities, and we will continue to invest in our business to capture further growth. For FY26 our outlook is unchanged."

As of 0830 GMT, Chemring shares were down 4.41% at 509p.







Reporting by Iain Gilbert at Sharecast.com