Chemring Group shares were down 7.1% to 340p in late morning trading on Wednesday, despite a climb in revenue to £220.4 million in HY1 2022 from £198.5 million in HY1 2021.
The firm’s EBITDA rose to £43.8 million compared to £37.6 million, alongside an growth in operating profit to £33.5 million against £28.1 million.
Chemring Group added an underlying pre-tax profit of £33.1 million from £27.2 million and a narrowed net debt of £18.5 million compared to £38.7 million.
The company highlighted that its HY1 2022 performance was in line with management expectations, with strong performance in both segments, and a continued trend of double-digit growth in orders, revenue and operating profit.
The firm added that its Sensors and Information underlying operating margin increased from 20.6% to 21.5%, driven by growth in the higher margin Roke business.
Meanwhile, its Countermeasures and Energetics underlying operating margin grew from 15.6% to 16.4% on improved operational execution across the sector.
Chemring mentioned its expectations for FY 2022 remained unaltered, with an estimated 85% of HY2 2022 revenue already in its order book or delivered to date.
“This has been a further period of strong operational and financial performance across the Group, with both sectors performing in line with our expectations,” said Chemring CEO Michael Ord.
“Our focus on building a stronger, higher quality and more resilient business has enabled us to negotiate numerous challenges including delays to customer procurement cycles, supply chain interruption, increased utility expenses and labour availability.”
“Despite these challenges and the choice to invest in Roke in the second half ahead of the revenue curve, the Group remains on course to maintain its delivery of sustainable performance and growth. With strong order cover for the full year, the Board’s expectations remain unchanged.”
Chemring Group announced a dividend hike of 19% year-on-year to 1.9p per share against 1.6p per share.