Claire Savage  

Hello, and welcome to Chemring Group PLC's Interim Results for 2025. I'm delighted to be joined here today by Mick and James to talk through these results and also to look at the longer-term prospects for the group.

Mick, if I may start with you, could you just run through the key highlights for you for this half year?

Michael Ord   Group Chief Executive & Director

Yes, absolutely. So it's been another successful half year for us. We've made real progress in delivering across all of our businesses, delivering our strategy around safety, environmental, customer performance, contract delivery.

I think the key standout metric across the whole of the half year has been the order intake. I think we've got an order intake of about GBP 488 million, which has resulted in us closing the books at half year with a record order book of GBP 1.3 billion. There's a lot of other numbers, and I'm sure James will go through all of those. But I think the key thing around the order book is that it's such a confirmation of the essential role that we're playing for so many customers around the products and services that we're providing in a time now which is vitally important with regards to defense and national security for so many countries.

Claire Savage  

And if we take a look at the macro environment and the trends that are occurring, what are your thoughts on this and the impact to the group?

Michael Ord   Group Chief Executive & Director

We're now in a time of increased international volatility and international tension and defense and national security is becoming ever more important to so many governments, especially across the NATO alliance and broader further appeal with some of our customers.

I think we're seeing a lot of governments now which are talking about investing more in defense and increasing the contribution that they're making. And you hear numbers around 2.5% GDP, 3% GDP, 5% GDP. But I think the key thing around all of that is, that it is an upward trend as governments recognize that now is the time that they have to invest in defense and national security.

Now clearly, from a Chemring perspective and such a broad reach that we have, both internationally and from products and services, then we believe that we're strategically very well positioned to capitalize on a lot of that growth.

Claire Savage  

So if we move over to financials now, James, could you just run through the key highlights of the financial performance for the year-to-date?

James Mortensen   CFO & Director

Yes. So results this half year in line with expectations. We saw revenue up 5%. That was really driven by a really strong performance in Countermeasures & Energetics. That was up 20.4% Operating profit up 8%, an improving margin up to 11.6%. That meant that EPS was up 3%. And so the Board has approved the dividend, up 4% at 2.7p.

Claire Savage  

I know we've spoken in the past about investments, particularly in the Energetics businesses. Could you give us an update on the progress?

Michael Ord   Group Chief Executive & Director

Yes, absolutely. Growth is a key fundament of the overall group strategy. And everyone knows that we've got a revenue target of GBP 1 billion by 2030, and the group is making excellent progress towards that. And that's going to require growth across all of the business.

But you specifically asked a question about Energetics. So yes, absolutely, we're seeing very, very significant growth in demand across all of our Energetics businesses. And that's in -- whether it's in Chicago, whether it's in Scotland or whether it's in Norway. And we've made very, very significant capital investment to build new production facilities or acquire new production facilities as in the case when we are in Chicago.

And the programs that are building those new facilities are on schedule. The teams are doing an amazing job. As you can imagine, if you're designing and building and commissioning facilities that make rocket motors or they produce high explosives, then these are very complex, highly regulated projects.

But the team in Norway and the team in Scotland, where we're building those facilities are making great progress, and they're scheduled to come online in a phased manner over the coming few years, and we're on schedule to do that.

That's going to position Chemring, especially in those markets as one of the largest providers of those types of material across the whole of Europe. And what we are seeing now is as those facilities are coming to life, a whole raft of new customers are engaging with the businesses to inquire about what capacity potentially could be available.

Claire Savage  

Great. So an exciting time for the group.

Michael Ord   Group Chief Executive & Director

Absolutely, absolutely.

Claire Savage  

I know you've spoken a bit today about driving innovation. Could you talk through what that means to Chemring?

James Mortensen   CFO & Director

Yes. So innovation, obviously, really, really important to Chemring, one of our core values. What I'd like to talk about today is a new product that Roke releasing this year. So they've used their deep understanding of electronic warfare and real-world experience to develop the next generation of product, and that's called Deceive. It's got a number of really cool key features. One, it's sovereign. It's got a software-defined radio at its core. It is multifunctional, so you can use it for electronic attack for counter drone operations. And also it's open architecture. So that means it's ready for the future now. We're really happy with the release that was released in May, and we've already seen amazing interest from over 15 international countries. So we're really excited about this new release.

Claire Savage  

So before we close today's conversation, could you just talk through your expectations going through to year-end?

James Mortensen   CFO & Director

Yes, sure. So expectations for the full year unchanged. That's supported by that really strong order cover at 85% for the full year. Underneath that, we expect to see low double-digit growth for Countermeasures & Energetics. And then we expect the softness that we've seen in Roke year-to-date to improve in the second half. So we're forecasting that the Sensor & Information division will be flat for the full year. Lastly, we're expecting the weighting in the second half to be similar to last year.

Michael Ord   Group Chief Executive & Director

Yes. I mean just building on what James says, I mean, look, we've got a really strong foundation for the second half, 85% order cover. We've got record order intake in H1. I think the key focus for the second half is for all of the businesses across the group is we continue to execute our strategy. It's all based around safety, excellence and innovation, which are our three values. And I see a very successful second half and then beyond.

Claire Savage  

Thank you, Mick. Thank you, James, and we look forward to meeting again in 6 months' time at our year-end.