Anti-aircraft flare maker Chemring (LON:CHG) had a tough first half as Middle East nations bartered over orders, but said the second six months was looking up, lifting its shares.
The group, which also makes sensors to detect roadside bombs, said first-half profits fell significantly as prolonged negotiations with Middle East countries delayed contracts.
Revenue from continuing operations reduced by 22.6% to £161.7mln against £208.8mln a year ago while underlying operating profit was £5.5 mln versus £22.4mln a year ago.
The group dropped from a £5.1mln first half profit last year to a £15.1mln loss in the six months to April 30 this year.
But Chemring won orders topping £50mln so far in the second half and forecast "further material orders" in the period.
The group's order book at April 30 was £502.8mln against £486.8mln at the end of October last year, of which £208.8mln was scheduled for delivery during the current financial year.
The orders came largely in the area of military countermeasures and energetic systems.
Chief executive Michael Flowers said the expected second half upturn would enable Chemring to maintain its full-year expectations.
Flowers has been refocusing the group away from markets propped up by operations in Iraq and Afghanistan towards longer term opportunities.
Those include Lockheed Martin's F-35 Joint Strike Fighter, anti-roadside bomb devices and chemical and biological detection programmes for the US Department of Defense.
Flowers said: "Overall, we are making good strategic and operational progress, and look forward with increasing optimism."
Chemring shares rose 6.75p to 212.25p in mid-afternoon trading in London.
Investec said it was cutting its 2015 earnings per share forecast by 9% but is leaving its 2016 estimate unchanged, with a new price target of 230p.
"We expect, as does the company, a significantly better second-half performance based on good order book visibility," the broker said in a note.