Chemring secures $345 million US Department of War contract awards
Chemring Group PLC on Thursday reported two US Department of War contract awards, enabling it to resume sustained manufacturing operations at its Philadelphia-based business, Alloy Surfaces Co Inc.
The Hampshire, England-based provider of technology products and services to the aerospace, defence and security markets, said a modification has been awarded to an indefinite delivery, indefinite quantity contract, to produce pyrophoric airborne decoys.
This award has a maximum value of $300 million over five years, Chemring said, with a guaranteed minimum award of $35 million per year for the first three years.
Chemring said deliveries are anticipated to begin in early financial 2028, with the defence assets to support aviation platforms across ‘the US Army, Air Force, Navy, Special Operations Command, and allied nations through Foreign Military Sales.’
The Department of War is also providing $45 million of funds through another agreement to restart manufacturing operations and transfer intellectual property rights associated with Alloy Surfaces’ pyrophoric decoys to the government.
Chemring noted that under this agreement, a ‘modest amount’ will be received up front, with the remainder spread over the next five years.
The company noted it is working with the US government to assess the financial profile of the awards, with it is set to present updated guidance at the year end. Chemring added that no impact on performance is anticipated for financial 2026 and financial 2027.
Shares in Chemring were trading 1.6% higher at 493.00 pence on Thursday morning in London.
‘As missile threats increase in scale and sophistication, air platform survivability remains mission?critical. 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,’ said Chief Executive Michael Ord.
‘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.’
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