Chemring Group (LSE:CHG), the defence and security technology group, has told shareholders its full-year outlook remains unchanged, despite a slower-than-expected start to the financial year caused by operational disruption at one of its US manufacturing sites.
The group said countermeasures production had been disrupted at Kilgore Flares, its fully automated facility in Tennessee, though the problems were now largely resolved.
As a consequence of the operational performance of the automated plant steadily improving, Chemring said it would retire a number of the Tennessee site's legacy operations and transfer manufacturing to the new facility, a move expected to result in a non-cash impairment charge.
The group's order book stood at £1.364 billion as of 30 January 2026, marginally ahead of £1.351 billion at the same point a year earlier.
Order intake in the first quarter reached £122 million, compared with £393 million in the equivalent period of the prior year, though the company noted that the earlier figure reflected several large multi-year contract wins that made for a tough comparison.
Expected revenue for the full year was 85% covered by first-quarter revenues and the current order book, up from 81% at the same stage last year.
Chief executive Michael Ord said the group was well-positioned to benefit from rising defence budgets across Nato and allied nations.
Chemring said that while the delayed publication of the UK's Defence Investment Plan had continued to create uncertainty in the domestic market, order intake had improved in recent months and the medium-term outlook for sustained defence spending remained strong.
In its Sensors and Information division, technology subsidiary Roke received a £22.5 million order related to the STORM Missile Defence Centre contract after the January reporting date.
Chemring warned that significant ongoing investment in expanding its energetics, or military explosives, capacity, funded through existing debt facilities, would push net debt higher at both the half-year and full-year stages.
The Norwegian government is separately funding up to £16 million towards a feasibility study into a second military explosives production facility, with the study due to conclude by the end of 2026.
The group said its full-year results would be weighted more heavily towards the second half than in the prior year.