First View: Confirms Alloy Surfaces Co Contract Award And Plant Restart

Research evidence excerpt

First View: Confirms Alloy Surfaces Co Contract Award And Plant Restart

UK | Aerospace & Defense Electronics

Chemring plc EquityJuneResearch25, 2026

FIRST VIEWFirst View: Confirms Alloy Surfaces Co

RATING BUYContract Award And Plant Restart

PRICE 485.40p^

Conclusion

Chemring has this morning, via an RNS, confirmed the US$300m IDIQ for PRICE TARGET | % TO PT 658.00p | +36%

pyrophoric airborne decoys which was recently published on the US DoW 52W HIGH-LOW 614p - 447p

website. As such, the information should largely have been assimilated FLOAT (%) | ADV MM (USD) 95.6% | 9.85

by the market; however, it is good news nonetheless and there is some MARKET CAP £1.4B | $1.8B

incremental detail in the release. Chemring will receive minimum orders of TICKER CHG LN

^Prior trading day's closing price unless otherwise

US$35m per annum for the first three years, whilst it will also receive US noted.

$45m of programme funds to restart manufacturing operations. As sole-

source supplier to the US DoW, we would expect margins associated with

this revenue stream to be LDD. First deliveries are expected in early FY28F

(Chemring will have to re-recruit and pass first article testing etc), with the

potential uplift to consensus FY28F EBITA being c2%.

Detail

Chemring has announced it has signed agreements with the US DoW to

enable resumption of sustained manufacturing operations at Alloy Surfaces

Company, which was put under strategic review in November 2025. A

modification has been awarded to an Indefinite Delivery, Indefinite Quantity

(“IDIQ”) contract, funded under the Defense Production Act, to produce

pyrophoric airborne decoys. The new award has a maximum value of US

$300 million over five years, with guaranteed minimum awards of $35

million per annum for the first three years.