Chemring Group (LSE:CHG) reported lower first-half profits but a record order book, and said it remained on track to meet full-year expectations as rising global defence spending continued to support demand across its core markets.
The maker of chaff, energetics, sensors and other defence technology posted revenue of £237.3 million for the six months to 30 April, up 7% from £222.8 million a year earlier.
Underlying operating profit fell 8% to £24.5 million as the underlying operating margin narrowed to 10.3% from 11.9%.
The decline reflected weaker profitability in its Sensors & Information division, where lower utilisation rates and a less favourable business mix weighed on performance. Chemring said trading improved during the second quarter and that results for the first half were in line with board expectations.
Demand remained particularly strong in the Countermeasures & Energetics business, driven by operational usage, stockpile replenishment programmes and new defence contracts.
Orders rose to a record £1.4 billion, up 8% year-on-year and the highest level in the company's history, despite a sub-normal level of UK government order placement.
Around £260 million of the backlog is scheduled for delivery in the second half of the 2026 financial year, with 91% of expected annual revenue already either delivered or secured in the order book.
Chief executive Michael Ord said: "These results reflect strong demand across our core markets, with our order book reaching a new record level.
"First half performance was in line with our expectations, despite near-term disruption in the UK market, and our full year outlook remains unchanged."
Net debt increased to £144.5 million from £93.3 million a year earlier as the company continued to invest in expanding energetics production capacity, spending £44 million on capital projects during the period.
The interim dividend was increased 4% to 2.8p a share.