LSE:CHG

Stock Analysis Report

Executive Summary

Chemring Group PLC engages in designing, manufacturing, supplying, and supporting high technology detection systems, countermeasures, and energetic products and technology services.

Snowflake

Fundamentals

Excellent balance sheet with reasonable growth potential.


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


Market Performance


7 Day Return

0.5%

CHG

-3.1%

GB Aerospace & Defense

0.2%

GB Market


1 Year Return

5.9%

CHG

7.0%

GB Aerospace & Defense

1.7%

GB Market

Return vs Industry: CHG underperformed the UK Aerospace & Defense industry which returned 7% over the past year.

Return vs Market: CHG exceeded the UK Market which returned 1.7% over the past year.


Shareholder returns

CHGIndustryMarket
7 Day0.5%-3.1%0.2%
30 Day-6.1%-5.5%-1.7%
90 Day7.2%5.2%-3.1%
1 Year8.2%5.9%10.7%7.0%6.7%1.7%
3 Year42.6%35.7%20.6%8.0%17.7%3.1%
5 Year-1.3%-19.2%34.2%7.0%36.1%5.5%

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?

1.89x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: CHG (£1.91) is trading above our estimate of fair value (£0.85)

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


Price To Earnings Ratio

PE vs Industry: CHG is unprofitable, so we can't compare its PE Ratio to the Aerospace & Defense industry average.

PE vs Market: CHG is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate CHG's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: CHG is good value based on its PB Ratio (1.9x) compared to the GB Aerospace & Defense industry average (2.2x).


Next Steps

Future Growth

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

47.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CHG is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.2%).

Earnings vs Market: CHG is forecast to become profitable over the next 3 year, which is considered above average market growth.

High Growth Earnings: CHG's loss is forecast to worsen by 0% next year.

Revenue vs Market: CHG's revenue (7.5% per year) is forecast to grow faster than the UK market (3.9% per year).

High Growth Revenue: CHG's revenue (7.5% 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 (12.6%).


Next Steps

Past Performance

How has Chemring Group performed over the past 5 years?

-2.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: CHG is unprofitable, and losses have increased over the past 5 years at a rate of -2% per year.

Accelerating Growth: Unable to compare CHG's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: CHG is unprofitable, making it difficult to compare its past year earnings growth to the Aerospace & Defense industry (-23.4%).


Return on Equity

High ROE: CHG has a negative Return on Equity (-6.47%), as it is currently unprofitable.


Return on Assets

ROA vs Industry: CHG is currently unprofitable, so its Return on Assets is negative.


Return on Capital Employed

ROCE Improving: CHG is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is Chemring Group's financial position?


Financial Position Analysis

Short Term Liabilities: CHG's short term assets (£152.6M) do not cover its short term liabilities (£158.7M)

Long Term Liabilities: CHG's short term assets (152.6M) exceeds its long term liabilities (60.8M)


Debt to Equity History and Analysis

Debt Level: CHG's debt to equity ratio (31.9%) is considered satisfactory

Reducing Debt: CHG's debt to equity ratio has reduced from 81.8% to 31.9% over the past 5 years.


Balance Sheet

Inventory Level: CHG has a high level of physical assets or inventory.

Debt Coverage by Assets: CHG's debt is covered by short term assets (assets are 1.688050x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable CHG has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: CHG is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by -10.1% per year.


Next Steps

Dividend

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

1.73%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%2.0%markettop25%5.4%industryaverage3.2%forecastin3Years2.2%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: CHG's dividend (1.73%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.99%).

High Dividend: CHG's dividend (1.73%) is low compared to the top 25% of dividend payers in the UK market (5.37%).

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: CHG is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: CHG's dividends in 3 years are forecast to be well covered by earnings (30.1% payout ratio).


Next Steps

Management

What is the CEO of Chemring Group's salary, the management and board of directors tenure and is there insider trading?

1.2yrs

Average management tenure


CEO

Michael Ord 0

1.3yrs

Tenure

UK£364,200

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 has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the UK market.

Compensation vs Earnings: Insufficient data to compare Michael's compensation with company performance.


Management Age and Tenure

1.2yrs

Average Tenure

Experienced Management: CHG's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Age and Tenure

3.0yrs

Average Tenure

58yo

Average Age

Experienced Board: CHG's board of directors are considered experienced (3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUK£18,19410 Apr 19
Sarah Ellard
EntityIndividual
Role
Member of the Board of Directors
Group Legal Director
Shares12,600
Max PriceUK£1.44
BuyUK£16,46018 Jan 19
Edmund Moriz Forster
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares10,000
Max PriceUK£1.65

Ownership Breakdown


Management Team

  • Sarah Ellard (48yo)

    Group Legal Director

    • Tenure: 8yrs
    • Compensation: UK£434.00k
  • Andrew Lewis (48yo)

    Group Finance Director & Director

    • Tenure: 2.8yrs
    • Compensation: UK£476.00k
  • Bill Currer

    President of CHG Group

    • Tenure: 1.1yrs
  • Simon Darling

    Managing Director of Chemring Countermeasures - UK

    • Tenure: 0yrs
  • Clancy Murphy

    Chief People Officer

    • Tenure: 0.9yrs
  • Michael Ord

    Group Chief Executive & Director

    • Tenure: 1.3yrs
    • Compensation: UK£364.20k
  • Ian Johns

    Group Operations Director

    • Tenure: 0.9yrs

Board Members

  • Carl-Peter Forster (65yo)

    Non-Executive Chairman

    • Tenure: 3.3yrs
    • Compensation: UK£200.00k
  • Andrew O. Davies (55yo)

    Independent Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: UK£55.00k
  • Sarah Ellard (48yo)

    Group Legal Director

    • Tenure: 8yrs
    • Compensation: UK£434.00k
  • Nigel Young (65yo)

    Senior Independent Non-Executive Director

    • Tenure: 3.6yrs
    • Compensation: UK£65.00k
  • Stephen King (58yo)

    Non-Executive Director

    • Tenure: 0.8yrs
  • Laurie Bowen (58yo)

    Non-Executive Director

    • Tenure: 0.2yrs
  • Andrew Lewis (48yo)

    Group Finance Director & Director

    • Tenure: 2.8yrs
    • Compensation: UK£476.00k
  • Michael Ord

    Group Chief Executive & Director

    • Tenure: 1.3yrs
    • Compensation: UK£364.20k

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£534.898m
  • Shares outstanding: 280.05m
  • 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 engages in designing, manufacturing, supplying, and supporting high technology detection systems, countermeasures, and energetic products and technology services. It operates through thr ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 20:32
End of Day Share Price2019/10/22 00:00
Earnings2019/04/30
Annual Earnings2018/10/31


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.