The Chemring Group plc Board continues to recognise that dividends are an important component of total shareholder returns. The Board's objective is for a growing and sustainable dividend and has met the target dividend cover of c.2.5 times underlying EPS, subject inter alia to maintaining a strong financial position.
The Board is recommending a final dividend in respect of the year ended 31 October 2024 of 5.2p (2023: 4.6p) per ordinary share. With the interim dividend of 2.6p per share (2023: 2.3p), this results in a total dividend of 7.8p (2023: 6.9p) per share, an increase of 13% on the prior year. If approved, the final dividend will be paid on 11 April 2025 to shareholders on the register on 21 March 2025. In accordance with accounting standards, this final dividend has not been recorded as a liability as at 31 October 2024.
Other financial highlights include:
2024 was in line with the Board's initial expectations despite H1 headwinds
Ø Revenue growth of 8%, driven by strong performance at Roke, up 17%, and growth in their specialist energetic materials businesses, up 12%, offset by a weaker period for Countermeasures
Ø Underlying operating profit margin of 13.9% (2023: 14.6%) primarily reflecting the impact of operational challenges at their Tennessee countermeasures business in the period
Ø Improved cash conversion of 102% (2023: 90%) with continued focus on working capital
A record order book of £1,038m, the highest in Chemring's history, providing excellent medium-term revenue coverage
Awarded c.£90m of grant funding to support capex investment to increase the capacity of their Norwegian site, amid unprecedented levels of demand for its products
Investment in their Energetics capacity expansion plan increased from £120m to £200m, excluding grant funding
Good progress made on capital projects to date, with c.£70m of capex spent in total during the period, and customers increasingly moving to long-term partnering agreements
Net debt was £52.8m (2023: £14.4m), given c.£70m investment in capex and a further £28.1m on the share buyback. Net debt to underlying EBITDA of 0.56 times (2023: 0.16 times) below internal target of <1.5 times
