The threat of global conflict will lead to a decade of rearmament as the West strengthens its defences, the head of a UK explosives manufacturer has warned.
Michael Ord, chief executive of Chemring, said that “rising geopolitical tensions around the world” have led governments to increase military spending.
The FTSE 250 company, specializing in devices to combat chemical and biological warfare, supplies large defense groups and NATO allies.
The comments came as it said the value of orders on its books rose 39 per cent in the first half of the year to a record £1.04 billion.
The defense industry has been boosted by increased military spending since the invasion of Ukraine and tensions in the Middle East, as well as concerns about China.
In demand: Chemring, which specializes in devices to combat chemical and biological warfare, supplies large defense groups and NATO allies.
“The momentum seen in 2023 has continued with another period of record order intake and an order book of over £1bn, the highest in Chemring’s history,” Ord said.
“Rising geopolitical tensions around the world are driving an upward cycle of fundamental rearmament that is expected to last at least the next decade.”
Chemring is expanding its explosives business in response to increased demand.
The rise in the value of its order book came alongside an 8 per cent rise in first-half revenue to £223.4 million.
“We now have ambitions to increase annual revenue to around £1 billion by 2030,” Ord said.
Neil Shah, an analyst at consultancy Edison Group, said the £1bn revenue target was “optimistic but achievable”.
The company received almost £90m in March to boost defense production across Europe.
The Government also recently announced that defense spending in the UK would rise to 2.5 per cent of gross domestic product by 2030.
But despite the bumper order intake, profits fell 24 per cent to £17.5m in the first half of the year.
The company attributed this to “adverse weather conditions” at its Tennessee plant (which makes infrared devices) and higher costs.
Chemring Sharean increase of almost 50 percent since the Hamas attacks on Israel in October, they were stable at 394.5 pence yesterday.