olivLaw · European equity research
Chemring Group PLC CHG.L
United Kingdom · London Stock Exchange · ISIN GB00B45C9X44 · Vertical: Listed companies from United Kingdom
Chemring Group PLC is a UK maker of high-technology defence and security systems, with sole source positions and high barriers to entry across countermeasures, energetics, sensors and information. The timing is supported by a defence upcycle that the company expects could last well into the next decade, although fiscal 2025 also showed delays in UK government orders.
At the close of 05 Nov 2026, Chemring Group PLC (CHG.L) stock was 5.33 GBP (−2.83% on the day), with market capitalisation 1.4 bn GBP, P/E 30.5 on diluted EPS of 0.18 GBP over the last 12 months, dividend yield 1.50%, beta 0.55, 52-week range 4.60–6.38 GBP.
Data as of · AI analysis dated · Source: ESEF annual reports and closing prices, computed by olivLaw.
Price history
Loading chart…
Technical reading
- RSI (14)
- 44.8
- weak (30–45)
- Bollinger (20, 2)
- 4.99 – 5.80
- in the lower half of the band · %B 0.42 · band width 15.0%
- SMA 50 / 200
- 5.35 / 5.35
- mixed trend
- MACD (12, 26, 9)
- 0.06 / 0.05
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | EURO STOXX 50 | vs EURO STOXX 50 | Vertical median | |
|---|---|---|---|---|
| 1 month | +4.8% | +0.4% | +4.4 pp | — |
| 3 months | −14.7% | −3.3% | −11.4 pp | — |
| 6 months | +5.1% | +4.0% | +1.2 pp | — |
| Year to date | +12.8% | +8.1% | +4.7 pp | — |
| 1 year | −5.3% | +10.7% | −16.0 pp | +5.8% |
| 3 years | +85.7% | +50.1% | +35.6 pp | +26.3% |
| 5 years | +75.0% | +43.6% | +31.4 pp | — |
Price returns, dividends excluded.
Quarterly results
ESEF annual reports carry no quarters: the results are annual (below).
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 33 percentile of its own 3-quarter history (min 25.2, median 32.7, max 147.1; quarters with earnings only).
Fiscal years
| Fiscal year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | 472.6 m | 488.3 m | 497.5 m |
| Revenue YoY | unavailable | +3.3% | +1.9% |
| Net income | 5.4 m | 39.5 m | 48.2 m |
| Net income YoY | unavailable | +631.5% | +22.0% |
| Diluted EPS | 0.02 | 0.14 | 0.18 |
| Diluted EPS YoY | unavailable | +642.1% | +24.1% |
| net % | 1.1% | 8.1% | 9.7% |
| Free cash flow | 33.2 m | 18.0 m | 900.0 k |
Balance sheet & financial health
Fiscal year 2025 · 31 Oct 2025
- Cash
- 65.3 m GBP
- Financial debt
- 91.6 m GBP
- Net debt
- 26.3 m GBP
- Equity
- 382.0 m GBP
- Total assets
- 863.1 m GBP
- Debt / equity
- 0.24x
- Current ratio
- 1.60x
- ROE
- 13.1%
- ROA
- 6.2%
- FCF margin
- 0.2%
Financial statements (source on every figure)
Revenue and net income (GBP)
Margins
Income statement · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Revenue | 472.6 m | 488.3 m | 497.5 m | esef· 14 Jan 2026verified |
| Operating income | 45.4 m | 56.6 m | 73.4 m | esef· 14 Jan 2026verified |
| Interest expense | 1.3 m | 4.8 m | 5.7 m | esef· 14 Jan 2026verified |
| Pre-tax income | 44.1 m | 51.8 m | 67.7 m | esef· 14 Jan 2026verified |
| Income tax | 6.4 m | 10.3 m | 14.4 m | esef· 14 Jan 2026verified |
| Net income | 5.4 m | 39.5 m | 48.2 m | esef· 14 Jan 2026verified |
| Diluted EPS | 0.02 | 0.14 | 0.18 | esef· 14 Jan 2026verified |
| Dividend per share | 0.07 | 0.08 | 0.08 | esef· 14 Jan 2026verified |
Balance sheet · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Cash | 6.4 m | 45.0 m | 65.3 m | esef· 14 Jan 2026verified |
| Receivables | 74.8 m | 91.0 m | 110.5 m | esef· 14 Jan 2026verified |
| Inventories | 101.7 m | 127.1 m | 143.2 m | esef· 14 Jan 2026verified |
| Current assets | 183.7 m | 264.0 m | 321.5 m | esef· 14 Jan 2026verified |
| Property, plant & equipment, net | 242.2 m | 287.8 m | 354.7 m | esef· 14 Jan 2026verified |
| Goodwill | 100.5 m | 98.5 m | 99.6 m | esef· 14 Jan 2026verified |
| Total assets | 596.4 m | 692.1 m | 863.1 m | esef· 14 Jan 2026verified |
| Long-term debt | 14.1 m | 43.7 m | 91.6 m | esef· 14 Jan 2026verified |
| Current liabilities | 142.1 m | 170.3 m | 201.4 m | esef· 14 Jan 2026verified |
| Total liabilities | 217.9 m | 335.8 m | 481.1 m | esef· 14 Jan 2026verified |
| Equity | 378.5 m | 356.3 m | 382.0 m | esef· 14 Jan 2026verified |
| Shares outstanding at year end | 284.2 m | 272.4 m | 270.8 m | esef· 14 Jan 2026derived |
Cash flow · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Operating cash flow | 65.9 m | 81.0 m | 91.1 m | esef· 14 Jan 2026verified |
| Capex | 32.7 m | 63.0 m | 90.2 m | esef· 14 Jan 2026verified |
| Free cash flow | 33.2 m ≈ | 18.0 m ≈ | 900.0 k ≈ | esef· 14 Jan 2026derived |
| Investing cash flow | -39.4 m | -47.6 m | -88.9 m | esef· 14 Jan 2026verified |
| Financing cash flow | -40.2 m | -37.3 m | 40.0 m | esef· 14 Jan 2026verified |
| Dividends paid | 17.3 m | 19.6 m | 21.5 m | esef· 14 Jan 2026verified |
| Share repurchases | 14.0 m | 41.0 m | 6.6 m | esef· 14 Jan 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 32 / 100
A scoring methodology on indicators and valuation, not investment advice.
score < 40
Closing price
05 Nov 2026Source: olivLaw, closing series
Market cap: 1.4 bn GBP
Key indicators
Coverage and freshness
Score by group
- Quality37
- Balance sheet87
- Valuation3
- Returns17
Estimated value range
unavailable — no valuation assumptions for the reporting currency
Valuation assumptions are editorial choices, not measured; beta is not measured.
Valuation methods
Assumptions (illustrative, editorial)
- Risk-free rate
- 6.5%
- Equity risk premium
- 6.0%
- Beta (default)
- 1.00
- Cost of equity
- 12.5%
- Terminal growth
- 3.0%
Factor scorecard
Unattractive profile · Score 32/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 15.1% | 54 (vs peers) | 17% |
| Net margin · Quality | 9.7% | 46 (vs peers) | 10% |
| FCF conversion · Quality | 1.9% | 0 (on a fixed band) | 10% |
| Revenue CAGR 3Y · Growth | unavailable | unavailable | — |
| EPS CAGR 3Y · Growth | unavailable | unavailable | — |
| Net debt / EBITDA · Balance sheet | unavailable | unavailable | — |
| Interest coverage · Balance sheet | 12.9x | 100 (on a fixed band) | 10% |
| Current ratio · Balance sheet | 1.6x | 66 (on a fixed band) | 7% |
| P/E (TTM) · Valuation | 30.5x | 6 (vs peers) | 17% |
| EV/EBITDA · Valuation | unavailable | unavailable | — |
| FCF yield · Valuation | 0.1% | 1 (on a fixed band) | 13% |
| Shareholder yield (distributions) · Returns | 1.9% | 28 (on a fixed band) | 10% |
| Payout ratio (FCF) · Returns | 2,388.9% | 0 (on a fixed band) | 7% |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet87/100 · 2/3 factors with a value
- Growth· partialunavailable · 0/2 factors with a value
- Quality37/100 · 3/3 factors with a value
- Returns17/100 · 2/2 factors with a value
- Valuation3/100 · 2/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
CHEMRING GROUP PLC (CHG.L). Latest full fiscal year: 2025; data up to 2025-10-31.
Figures computed from the financial statements: revenue 497.5 m GBP in 2025; YoY growth 1.9%; net margin 9.7%; ROE 13.1%.
The estimated value range is 0.78–0.97 GBP per share (median of 3 methods, agreement: low); assumptions are illustrative. Against the central value of 0.87 GBP, the price of 5.33 GBP leaves a potential of -83.7% (value / price − 1) and a margin of safety of -514.5% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 32/100, methodological classification: unattractive profile (score, margin of safety and method agreement together; not a judgement of the right price). Groups assessed only in part: growth. Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- Interest coverage: 12.9x
What contradicts it
- FCF conversion: 1.9%
- P/E (TTM): 30.5x
- FCF yield: 0.1%
- Shareholder yield (distributions): 1.9%
- Payout ratio (FCF): 2,388.9%
- The price is above the estimated value range
- The valuation methods diverge
Not assessed (insufficient data or a ratio without meaning): Revenue CAGR 3Y, EPS CAGR 3Y, Net debt / EBITDA, EV/EBITDA.
Versus the vertical median
Listed companies from United Kingdom · same country · compared with 39 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| BATS.LBritish American Tobacco P.L.C. | 104.3 bn | 13.5 | 16.5% | 30.3% | −1.0% | +7% / +88% |
| ABF.LAssociated British Foods PLC | 14.7 bn | 14.3 | 9.2% | 5.3% | −3.1% | −5% / −15% |
| 0EV1.LCarnival PLC | 5.5 bn | 4.1 | 46.7% | 13.4% | +6.4% | unavailable / unavailable |
| BAB.LBabcock International Group PLC | 5.1 bn | 24.7 | 34.7% | 4.1% | +7.2% | −10% / +158% |
| AUTO.LAutotrader Group PLC | 4.8 bn | 16.4 | 60.2% | 47.1% | +3.9% | −13% / −23% |
| BBY.LBalfour Beatty PLC | 4.2 bn | 16.3 | 23.2% | 2.8% | +15.2% | +20% / +160% |
| ABDN.LAberdeen Group PLC | 4.1 bn | 10.8 | 8.0% | 28.9% | −2.1% | +11% / +41% |
| BKG.LThe Berkeley Group Holdings PLC | 3.6 bn | 11.3 | 8.8% | 13.4% | −4.2% | −0% / −22% |
| BME.LB&M European Value Retail PLC | 2.9 bn | 17.4 | 21.2% | 2.8% | +3.7% | +68% / −51% |
| AJB.LAj Bell PLC | 2.4 bn | 22.8 | 49.9% | 33.1% | +18.0% | +8% / +128% |
| CHG.LChemring Group PLC | 1.4 bn | 30.5 | 13.1% | 9.7% | +1.9% | +11% / +69% |
| ASHM.LAshmore Group PLC | 1.4 bn | 13.9 | 13.1% | 71.6% | −0.1% | +28% / +18% |
| BCG.LBaltic Classifieds Group PLC | 1.2 bn | 23.2 | 15.8% | 57.6% | +6.9% | −99% / −99% |
| APN.LApplied Nutrition PLC | 763.6 m | 36.2 | 41.2% | 19.7% | +24.2% | +71% / unavailable |
| BAG.LA.G. Barr P.L.C. | 671.9 m | 14.4 | 14.4% | 10.8% | +4.0% | −7% / +26% |
| ASC.LAsos PLC | 494.5 m | — | -81.3% | -12.0% | −14.7% | +71% / +8% |
| ALFA.LAlfa Financial Software Holdings PLC | 486.8 m | 16.3 | 61.5% | 23.8% | +15.3% | −28% / +10% |
| AML.LAston Martin Lagonda Global Holdings PLC | 344.3 m | — | -93.4% | -39.2% | −20.6% | −45% / −85% |
| APTD.LAptitude Software Group PLC | 111.3 m | 28.5 | 7.2% | 6.2% | −7.3% | −30% / −23% |
| AMGO.LAmigo Holdings PLC | 9.9 m | — | — | — | −81.9% | +325% / +844% |
| ASBE.LAssociated British Engineering PLC | 605.3 k | — | -19.1% | — | unavailable | unavailable / unavailable |
| AMIF.LAmicorp Fs (uk) PLC | 221.6 k | 0.1 | 27.5% | 9.1% | +8.1% | unavailable / unavailable |
| AAF.LAirtel Africa PLC | — | — | 24.1% | 10.6% | +29.5% | −7% / +164% |
| AAL.LAnglo American PLC | — | — | -19.3% | -20.2% | +4.5% | +30% / +76% |
| ACG.LAcg Metals Limited | — | — | -80.3% | -32.0% | +134.8% | +60% / +63% |
1- and 3-year price returns: for CHG.L from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (GBP)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 3.12 Total return -40% · Per year -40% | 5.52 Total return 5% · Per year 5% | 8.33 Total return 58% · Per year 58% |
| 3 years | 2.87 Total return -43% · Per year -17% | 5.73 Total return 12% · Per year 4% | 9.52 Total return 85% · Per year 23% |
| 5 years | 2.64 Total return -45% · Per year -11% | 5.95 Total return 20% · Per year 4% | 10.87 Total return 115% · Per year 17% |
- Exit P/E± 1.43
- Net margin± 1.00
- Annual revenue growth± 0.84
- Annual dilution± 0.08
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
In brief
Chemring Group PLC is a UK maker of high-technology defence and security systems, with sole source positions and high barriers to entry across countermeasures, energetics, sensors and information. The timing is supported by a defence upcycle that the company expects could last well into the next decade, although fiscal 2025 also showed delays in UK government orders 1.
SWOT
Strengths
- More than half of revenue comes from sole source positions, and the group has solid margins and strong cash conversion 1.
- The company operates licensed, highly automated sites and has a long heritage in high-hazard manufacturing 1.
- The order book grew during fiscal 2025 and covers a high share of expected 2026 revenue 1.
Weaknesses
- The sensors and information division declined in fiscal 2025 because of government order delays and a US programme transition 1.
- Net debt rose in fiscal 2025 because of capital investment, which reduces financial flexibility 1.
- Reliance on government orders makes revenue sensitive to customers' budget timing 1.
Opportunities
Risks
- Government order delayshigh
Delays in UK government orders could continue to affect the sensors and information division.
- Concentration on a few programmesmedium
Reliance on sole source programmes and specific contracts could amplify the impact of a contract loss.
- Capital investment and debtmedium
Investment in new facilities could increase net debt if operating cash flow declines.
- Physical climate riskslow
Extreme weather and heat stress could disrupt production at certain locations.
- Climate transitionmedium
Decarbonisation requirements in customer contracts could require additional investment.
Investment thesis
What would need to be true (bull case)
- Sole source positions and high barriers to entry could support margins and revenue over the long term, according to the company's assessment 1.
- The order book has grown and covers a large share of expected revenue, which could support growth plans 1.
- The rearmament cycle in Europe and the US could continue for several years, especially in energetics and countermeasures 1.
What would break the thesis
- The sensors and information division fell 17.5% in fiscal 2025, and a recovery could depend on the UK government's timing 1.
- Net debt rose in fiscal 2025, which could limit flexibility if investment remains high 1.
- The 2030 revenue ambition requires execution without delays, and programme risks could postpone results 1.
What to watch
- Order intake trend in the sensors and information division2026
- Start of live production at the new Scottish propellants facilityearly 2027
- Progress toward the c.£1bn annual revenue ambition2030
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
The business
According to the annual report for the year ended 31 October 2025, Chemring's business model rests on high barriers to entry, engineering expertise, sole source positions and durable customer relationships. Over 50% of revenue is sole source, reflecting its embedded role in critical platforms 1. The group targets niche, high-margin markets such as advanced sensors, electronic warfare, cyber and energetic materials 1.
The group invests in capacity, innovation and bolt-on acquisitions, with innovation spending above £100m a year, about 80% of which is customer funded 1. Net debt at the year end was £89.0m, higher than the prior year because of capital investment, while operating cash generation remained strong 1.
Segments
Countermeasures & Energetics
This segment generated revenue of £322.7m, up 16.8%, with underlying operating profit of £61.6m and a margin of 19.1% 1. Demand for energetic materials and countermeasures stayed strong, and energetics order intake grew 50.6% 1.
Sensors & Information
Revenue in this segment fell 17.5% to £174.8m, and underlying operating profit fell 24.6%, due to delayed UK government orders and a fallow year at the US business as it moved between LRIP and FRP contracts 1. Roke cut costs through the departure of about 80 employees, and the group was awarded a £251m six-year STORM framework 1.
Market context
Defence spending is rising in Europe and the US, and the group describes a rearmament upcycle that could last well into the next decade 1. The UK aims to reach 2.6% of GDP on defence by 2027, and £6bn is projected for munitions and energetics over the current parliament 1.
The US Department of Defense FY26 funding request is US$848.3bn, and the group believes its differentiated capabilities give it an opportunity in this market 1. NATO's 5% of GDP pledge by 2035 supports European demand for defence capabilities 1.
Trends
- Rearmament cycletailwind
Geopolitical tensions and rising defence budgets could support the group's long-term growth, according to the company's own assessment 1.
- Electronic warfare and cybertailwind
The UK government places electronic warfare and cyber at the core of national defence, which could open opportunities for the Roke division 1.
- Delayed government ordersheadwind
Delays in UK government order placement weighed on the sensors and information division in fiscal 2025 1.
- Shift to low-carbon technologiesmixed
Climate-related requirements in customer contracts could require significant capital spending, while also creating ways to keep customers 1.
Competitive position
The supplied sources do not explicitly name the group's competitors; the company presents itself as a world leader in advanced countermeasures and a preferred supplier in niches with high barriers to entry 1. Sole source positions reduce competitive pressure on certain platforms but do not eliminate it 1.
Competition remains relevant in sensors and information, where performance depends on the timing of government orders and the transition of US programmes 1. Specific competitors should be verified from other sources, since the documents provided do not name them 1.
- Competitors not named in source
The documents provided do not name the group's direct competitors.
- Countermeasures and energetics suppliers
The advanced countermeasures market has several global suppliers, but the source does not identify them.
- Sensor and electronic warfare system integrators
Competition in the sensors and information area is not detailed in the documents provided.
- European and US defence suppliers
Relevant to defence demand, without clear identification in the sources.
News & filings
In the press
- On Norway’s Oslo fjord, activists battle Chemring Nobel’s plan for Europe’s biggest explosives plantEUobserver · 27 Aug 2026 · EN
Annual reports (ESEF)
- Annual report 202514 Jan 2026
- Annual report 202430 Jan 2025
Sources
- [1] Annual report, fiscal year ended 2025-10-31 (ESEF) · SEC / Chemring Group PLC · 31 Oct 2025
Figures computed by olivLaw from ESEF annual reports and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.