Chemring secures two new US defence contracts worth a combined $345m

(Sharecast News) - Aerospace and defence firm Chemring has secured two new US defence contracts worth a combined $345m, enabling the restart of sustained manufacturing at its Alloy Surfaces Company decoy facility in Philadelphia.

Chemring said on Thursday that it had signed a modification to an existing IDIQ contract under the Defense Production Act for the supply of pyrophoric airborne decoys. The award carries a maximum value of $300m over five years, with guaranteed minimum orders of $35m a year for the first three years. Deliveries were expected to begin in early FY28 and will support multiple US military branches and allied customers through Foreign Military Sales.

The FTSE 250-listed firm has also agreed a separate $45m OTA funding package to restart production and transfer ASC's intellectualproperty rights to the Department of War. A small portion will be received upfront, with the remainder paid over five years.

Chemring said it was working with the DoW to assess the financial profile of the awards and will update guidance at the year end. No impact was expected in FY26 or FY27.

Chief executive Michael Ord said: "As missile threats increase in scale and sophistication, air platform survivability remains missioncritical. Today's announcement underscores the sustained and increasingly resilient demand we are seeing across our global countermeasures business and its ability to generate attractive returns for shareholders.

"This award builds on our already strong order cover across Countermeasures & Energetics and reflects our customer's trust and confidence in the vital role Chemring plays in NATO's defence industrial base."

As of 0825 BST, Chemring shares were up 1.36% at 492p.

Reporting by Iain Gilbert at Sharecast.com

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