LSE:CHG

Stock Analysis Report

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Executive Summary

Chemring Group PLC supplies countermeasures, sensors, and energetic solutions to aerospace, defense, and security industries in the United States, the United Kingdom, Norway, and Australia.


Snowflake Analysis

Excellent balance sheet with acceptable track record.


Similar Companies

Share Price & News

How has Chemring Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CHG's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

4.3%

CHG

0.3%

GB Aerospace & Defense

0.1%

GB Market


1 Year Return

31.5%

CHG

-6.8%

GB Aerospace & Defense

-15.3%

GB Market

Return vs Industry: CHG exceeded the UK Aerospace & Defense industry which returned -6.8% over the past year.

Return vs Market: CHG exceeded the UK Market which returned -15.3% over the past year.


Shareholder returns

CHGIndustryMarket
7 Day4.3%0.3%0.1%
30 Day-7.5%-6.7%-4.6%
90 Day33.2%-0.9%13.1%
1 Year34.1%31.5%-5.4%-6.8%-11.4%-15.3%
3 Year44.4%36.5%-11.3%-18.8%-3.4%-15.2%
5 Year38.3%12.6%15.8%-1.4%15.4%-10.3%

Price Volatility Vs. Market

How volatile is Chemring Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Chemring Group undervalued compared to its fair value and its price relative to the market?

19.73x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CHG (£2.53) is trading above our estimate of fair value (£0.93)

Significantly Below Fair Value: CHG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CHG is poor value based on its PE Ratio (19.7x) compared to the Aerospace & Defense industry average (17.6x).

PE vs Market: CHG is poor value based on its PE Ratio (19.7x) compared to the UK market (15x).


Price to Earnings Growth Ratio

PEG Ratio: CHG is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: CHG is overvalued based on its PB Ratio (2.3x) compared to the GB Aerospace & Defense industry average (2.1x).


Next Steps

Future Growth

How is Chemring Group forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

11.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CHG's forecast earnings growth (11.7% per year) is above the savings rate (1.2%).

Earnings vs Market: CHG's earnings (11.7% per year) are forecast to grow slower than the UK market (21.2% per year).

High Growth Earnings: CHG's earnings are forecast to grow, but not significantly.

Revenue vs Market: CHG's revenue (5.2% per year) is forecast to grow faster than the UK market (3.4% per year).

High Growth Revenue: CHG's revenue (5.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CHG's Return on Equity is forecast to be low in 3 years time (12.3%).


Next Steps

Past Performance

How has Chemring Group performed over the past 5 years?

18.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CHG has high quality earnings.

Growing Profit Margin: CHG became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: CHG has become profitable over the past 5 years, growing earnings by 18.6% per year.

Accelerating Growth: CHG has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: CHG has become profitable in the last year, making it difficult to compare its past year earnings growth to the Aerospace & Defense industry (23.4%).


Return on Equity

High ROE: CHG's Return on Equity (11.4%) is considered low.


Next Steps

Financial Health

How is Chemring Group's financial position?


Financial Position Analysis

Short Term Liabilities: CHG's short term assets (£266.5M) exceed its short term liabilities (£173.8M).

Long Term Liabilities: CHG's short term assets (£266.5M) exceed its long term liabilities (£148.8M).


Debt to Equity History and Analysis

Debt Level: CHG's debt to equity ratio (50.4%) is considered high.

Reducing Debt: CHG's debt to equity ratio has reduced from 54.5% to 50.4% over the past 5 years.

Debt Coverage: CHG's debt is well covered by operating cash flow (56.1%).

Interest Coverage: CHG's interest payments on its debt are well covered by EBIT (11.4x coverage).


Balance Sheet


Next Steps

Dividend

What is Chemring Group current dividend yield, its reliability and sustainability?

1.43%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: CHG's dividend (1.43%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.99%).

High Dividend: CHG's dividend (1.43%) is low compared to the top 25% of dividend payers in the UK market (5.55%).


Stability and Growth of Payments

Stable Dividend: CHG's dividend payments have been volatile in the past 10 years.

Growing Dividend: CHG's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.9%), CHG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CHG's dividends in 3 years are forecast to be well covered by earnings (28% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.0yrs

Average management tenure


CEO

Michael Ord

2yrs

Tenure

UK£1,021,000

Compensation

Mr. Michael Ord has been Group Chief Executive and Director at Chemring Group PLC since June 1, 2018. Prior to joining Chemring, Michael worked for BAE Systems, where he held a number of senior roles acros ...


CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD1.27M) is about average for companies of similar size in the UK market ($USD1.18M).

Compensation vs Earnings: Michael's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Michael Ord
Group Chief Executive & Director2yrsUK£1.02m0.018% £126.3k
Andrew Lewis
Group Finance Director & Director3.5yrsUK£1.16m0.040% £287.3k
Sarah Ellard
Group Legal Director8.75yrsUK£753.00k0.037% £266.1k
Clancy Murphy
Chief People Officer1.67yrsno datano data
Paul MacGregor
Managing Director of Rokeno datano datano data
Bill Currer
President of CHG Group1.83yrsno datano data
Simon Darling
Managing Director of Chemring Countermeasures - UKno datano datano data

2.0yrs

Average Tenure

Experienced Management: CHG's management team is considered experienced (2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Michael Ord
Group Chief Executive & Director2yrsUK£1.02m0.018% £126.3k
Andrew Lewis
Group Finance Director & Director3.5yrsUK£1.16m0.040% £287.3k
Sarah Ellard
Group Legal Director8.75yrsUK£753.00k0.037% £266.1k
Edmund Moriz Forster
Independent Non-Executive Chairman4yrsUK£200.00k0.011% £75.7k
Andrew O. Davies
Independent Non-Executive Director4.17yrsUK£65.00kno data
Stephen King
Independent Non-Executive Director1.58yrsUK£53.00k0.021% £152.7k
Laurie Bowen
Independent Non-Executive Director0.92yrUK£14.00k0.0053% £37.9k
Fiona MacAulay
Non-Executive Director0.083yrno datano data

2.8yrs

Average Tenure

56yo

Average Age

Experienced Board: CHG's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CHG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Chemring Group PLC's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Chemring Group PLC
  • Ticker: CHG
  • Exchange: LSE
  • Founded: 1905
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: UK£711.770m
  • Shares outstanding: 281.89m
  • Website: https://www.chemring.co.uk

Number of Employees


Location

  • Chemring Group PLC
  • Roke Manor
  • Old Salisbury Lane
  • Romsey
  • Hampshire
  • SO51 0ZN
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CHGLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
CMGM.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
CMN1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
CHGLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
CMGM.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDOct 2010

Biography

Chemring Group PLC supplies countermeasures, sensors, and energetic solutions to aerospace, defense, and security industries in the United States, the United Kingdom, Norway, and Australia. The company operates through two segments, Sensors & Information and Countermeasures & Energetics. The Sensors & Information segment develops and manufactures explosive hazard detection equipment; chemical and biological threat detection equipment; and electronic countermeasures, as well as network protection technologies. The Countermeasures & Energetics segment offers expendable countermeasures for air, sea, and land platforms; cartridge/propellant actuated devices; pyrotechnic devices for satellite launch and deployment; aircraft and space launch systems; missile components; extruded double base propellants; separation sub-systems; actuators; and energetic materials, as well as aircrew egress and safety systems. Chemring Group PLC also exports its products. The company has operations in approximately 50 countries worldwide. Chemring Group PLC was founded in 1905 and is headquartered in Romsey, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/05 20:49
End of Day Share Price2020/07/03 00:00
Earnings2020/04/30
Annual Earnings2019/10/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.