Chemring Group PLC ($CHG)

Good morning, and welcome to the Chemring's Interim Results Presentation for the 6 months to April 30, 2026. I'm Mick Ord, the group's Chief Executive, and I'm joined this morning by our CFO, James Mortensen. I'll begin with the first half headlines, then James will take you through the financial and operational performance in more detail. I'll then comment on the group's environment, the market environment and spend some time on our key growth drivers and why this gives us confidence in Chemring's future growth. We'll then take your questions at the end. Operational and trading performance in the first half was in line with our expectations. Despite the headwinds in the U.K. market, order inflow in recent months has been encouraging, improving our near-term visibility and reinforcing our confidence in the full year. Approximately 91% of forecast 2026 revenue had either already been delivered or was in the order book at April 30, and our full year expectations, therefore, remain unchanged. Market demand is strong, as growing geopolitical instability drives a shift to high-intensity deterrence and structurally higher defense and national security budgets. Against this backdrop, we continue to invest in areas which are aligned with our customers' priorities, particularly in Countermeasures & Energetics where we delivered first half growth and where our capacity expansion projects continue at pace. We continue to execute against our strategy and positioning the group for strong future growth. James will take you through the financial performance in a moment, so I won't go into detail here. For me, I'd call out the increase in revenue, reflecting a strong performance in Countermeasures & Energetics, the return to growth in Sensors & Information and the order book of GBP 1.4 billion, which is another record for the group. I'd also highlight our safety performance. We have reduced our total recordable injury frequency rate from 0.63 to 0.31, which reflects the progress we are making in our proactive safety culture and our 0-harm ambition, and I want to acknowledge the focus and commitment of all of my colleagues across Chemring in keeping safety at the forefront of everything that we do. With that, I'll now hand over to James.

Thanks, Mick. Before I start, you'll notice a few images of the Artemis mission throughout the deck. We're proud of our growing role in the space industry and Artemis is a great example of the critical programs we're contributing to. There's more detail in the appendix. Turning to the results. Performance in the first half was in line with expectations and our focus is now firmly on delivering the second half. The order book reached a record of GBP 1.4 billion, up 8%. Revenue, up 7%, showing continued momentum. Operating profit and operating margin were lower year-on-year, and that flowed through to EPS. Cash conversion was lower, mainly due to working capital investment to support H2 deliveries. An interim dividend of 2.8p declared, up 4%. Next, let me take you through the segmental performance. Starting with Countermeasures & Energetics, another strong performance with both revenue growth and margin expansion. Revenue grew 9% as the businesses ramp in line with our plan, meeting our customers' unprecedented demand. This led to operating profit up 32% and margin increased to 18.4%. This improvement was driven by better commercial terms and our rigorous focus on operational excellence. Turning to Sensors & Information, which performed as expected, revenue growth and strong order intake, but margins impacted by product mix and maintaining operational capability. There were clear positives. Order inflow was up nearly 60%, as we saw the Roke business stabilize with strength in national security. We therefore returned to growth with revenue up 3%. As expected, operating profit and margin were lower, and there were 3 main drivers. First, we deliberately maintained operational capability and so had lower utilization in Roke. This was to support improving national security demand and to support ourselves -- and to position ourselves to take advantage of the significant U.K. MoD opportunity pipeline as it arrives. Second, revenue mix. Early CORTEXA preproduction units carried lower margins. We expect to improve commercial terms going forward as we enter full-scale production. Third, pass-through. The first work package on the GBP 251 million missile defense center project increased the proportion of low-margin pass-through revenue. Turning to the cash flow. Cash conversion was 42% in H1, mainly reflecting our decision to increase safety stocks and secure inventory for H2 expected revenue. We expect an improvement in H2 conversion with full year guidance in the range of 80% to 85%. CapEx was GBP 44 million with good progress across our expansion projects. Net debt increased as expected through the peak investment phase. We returned GBP 19 million to shareholders, GBP 14 million through the dividend and GBP 5 million through the buyback. We also purchased some shares to satisfy acquisition consideration and employee share options. We signed an additional GBP 80 million UKEF facility, which will replace the current UKEF facility as it expires. Together with the RCF and U.S. overdraft, we now have GBP 342 million of available facilities. We closed the period with net debt of GBP 145 million or 1.5x leverage. We do expect net debt to rise further, but in line with market expectations. Next, let me update you on the Energetics expansion projects, which continue at pace. Chicago, complete, on budget and on schedule. Fit-out is done, production ramping. We are now focused on lean practices to maximize output. The additional capacity positions us well for future demand and gives us optionality should needs increase following the conflict in the Middle East. Scotland remains on track, also on budget and on schedule. Construction is complete, machinery installed and commissioning underway. We remain on track to deliver revenue in '27. Norway, Phase 1 complete and on budget. Phase 2 is progressing well, groundworks are nearly complete, concrete foundations for nearly all the buildings laid. And as you can see, the first building is nearing completion with the second approaching halfway. Across all the sites, we remain on track to deliver GBP 100 million in revenue and GBP 30 million in operating profit by '28. We're also making good progress on a potential second site in Norway, the greenfield. As a reminder, this is for a facility at least as big as our enlarged facility and a location has been identified about 25 kilometers southwest of the current site. We are now in the concept selection phase, fully funded by the Norwegian government with around GBP 16 million and expected to report out in early '27. Next, let's look at order cover and the book and bill for the rest of the year. What gives us confidence in our full year guidance? Our record order book provides 91% cover for the rest of the year, that's up 600 basis points on the prior year. In Countermeasures & Energetics, that order cover is strong, nearly fully covered this year and 81% and 68% in the following 2 years. In Sensors & Information, order cover is now 84%, up from 64% last year, a significant improvement. If we break down the book and bill, the majority relates to expected orders in Countermeasures & Energetics and high confidence renewals in national security. Those EW product sales are to a number of international customers where tenders are in process. And lastly, there are a couple of orders to the U.K. MoD. These are largely for programs we have been delivering on, but procurement delays have pushed timing. And so to guidance. FY '26 guidance remains unchanged from the year-end, so I won't go through it in detail. It's supported by 91% order cover and an improving performance in the second quarter with 70% operating profit expected in H2. Cash conversion is expected to be 80% to 85% for the full year, reflecting a much stronger H2. As always, there are external factors to monitor. I just flag, while we have seen no supply chain issues and energy is well hedged this year, we continue to monitor the impact of the Middle East situation. And so we will continue to balance near-term performance with longer-term growth and value creation. And with that, I'll hand back to Mick for the strategy section.

Thanks, James. I'll now turn to the market environment where geopolitical tensions are at an increasingly elevated levels. This is driving a realarmment cycle, which we expect to last at least a decade and probably longer. And it is these fundamental market changes which underpin our confidence in the long-term outlook. This slide summarizes why we believe defense spending is on a structurally higher trajectory irrespective of whether we see peace deals in Ukraine or the Middle East. There are several factors behind this, but I want to focus on 2. Firstly, defense planning assumptions have changed. NATO has shifted from expeditionary operations to persistent territorial defense and peer conflict readiness. To deliver these changes, we will require more durable and growing defense budgets. 2% of GDP is now a floor not a ceiling. Defense spending is becoming more politically embedded across Europe with multiple NATO members moving towards the alliances ambition of 5% by 2035. That shift also supports multiyear procurement visibility rather than sporadic demand. Secondly, the significant material demand arising from the conflicts in Ukraine and the Middle East, have drawn down inventories and exposed vulnerabilities in the defense industrial base after years of underinvestment. Rebuilding these inventories require sustained production at scale, not one-off orders. Defense industrial capacity is now being treated as a strategic infrastructure with governments prioritizing sovereign and allied supply chains and supporting long-term framework contracts and capacity expansion, particularly in Energetics. Against this backdrop, demand and investment is concentrated in areas where Chemring's capabilities are highly relevant. These include, but are not limited to, long-range strike missiles, integrated air and missile defense systems, space capabilities, cyber and electronic warfare and counter drone technologies. Our differentiated capabilities are therefore well matched to where our customers are prioritizing spend, supporting sustained growth across both our home markets. I now want to spend a few minutes on some of the group's key growth areas. Starting with missiles and munitions, where Chemring is a major merchant supplier of high-grade military explosives and energetically actuated devices that are essential to missiles and advanced munition systems. We've called out on this slide some of the key missile and munition programs on which we are a key supplier and at the bottom, given examples of the types of materials and devices into which we supply. We supply highly engineered, designed in products and materials that are not easily substituted. They require significant regulatory clearance and involve very long qualification cycles. As our prime contractor customers seek to increase missile and munition output, demand for these materials and devices rises yet the pool of capable suppliers remains limited. Across the NATO defense industrial base, the supply of high-grade military explosives, such as HMX and RDX and insensitive-munition compositions is recognized as an area of significant undercapacity. Chemring already has licensed infrastructure and capacity, deep expertise in formulation, production and handling of these materials, which positions us strongly as governments and prime contractors prioritize supply chain resilience and domestic sourcing. While some European companies have announced their intention to expand supply of lower-grade explosives such as TNT, there are no mature plans for large-scale HMX production, which provides us with a first-mover opportunity in the market. It is these market dynamics, which continue to reinforce our decision to invest in additional capacity through a combination of customer-funded and self-funded projects. I'm often asked whether demand across Countermeasures & Energetics would ease if there were peace in Ukraine and the Middle East, so I thought I'd talk to that for a moment. Operation Epic Fury and ongoing operations in the Middle East have to date cost approximately $25 billion and have materially depleted U.S. inventories of multiple missile systems. In addition, even before operation Epic Fury, many analysts and commentators judge stockpiles to be insufficient for peer conflict scenarios. So there is now a very significant imperative for the U.S. Department of War to ramp up production to replenish stocks of existing systems and to move new programs into production phases. As a result, the Trump Administration has announced several multiyear agreements with industry prime contractors to increase output and place missile production on a wartime footing. And as a merchant supplier into many of these programs, Chemring is well placed to benefit from this increased demand. In Europe, demand is being shaped by a combination of current battlefield consumption, structural stockpile gaps and long-term rearmament decisions. And on both sides of the Atlantic, governments are increasingly seeing defense industrial capacity itself as a core element of deterrence not just as a supporting function. The bottom line is that missile and munition demand is being shaped less by short-term crisis and more by a structural shift towards sustained rearmament with higher stockpiles and usage assumptions. The next area I want to touch on is air and naval platform protection. Given missile threats relentlessly increase in both number and sophistication, platform survivability remains paramount and mission-critical across air and maritime domains, and we see a growth trajectory for countermeasures extending well into the 2030s. As the leading global supplier of countermeasures, Chemring is uniquely positioned to benefit. With more than 65% of the addressable market share, our products protect approximately 85% of NATO's air fleets and 60% of NATO's naval fleets. Our leading incumbency gives us a real advantage as customers expand stockpiles and plan for higher usage rates. In the first half, we secured GBP 123 million of Countermeasures orders, which is up 486% year-on-year, with demand primarily coming from European customers. Innovation also matters in this market, and we have several development programs underway on both sides of the Atlantic, including protection for uncrude platforms and threat agnostic countermeasures designed to address both current and emerging threats. We do have market leadership, deep customer relationships and growing demand, and therefore, the group's position in air and naval platform protection continues to strengthen as the market expands. Finally, let me turn to Roke and the critical role its technologies play in the defense of the United Kingdom and increasingly international customers. On this slide, I called out the areas of cyber, electronic warfare, resilient navigation and counter drone. And indeed, there are many more technologies I could have mentioned. And whilst there is a great deal of focus on defense-related opportunities, we must always remember that national security and law enforcement remain at the very core of Roke, continuing to provide a stable underpin to the business, as evidenced by approximately GBP 40 million worth of program renewals secured to date. And in addition, National Security provides a technology and innovation catalyst, which benefits the entire business. To help mitigate the near-term headwinds resulting from the delayed publication of the U.K.'s defense investment plan, the Roke team continued to take action to protect and reposition the business and are seeking to broaden their international customer base. Roke's defense products business has a 5-year international sales pipeline of more than GBP 300 million and continues to invest in expanding its product portfolio. Of note, their counter drone system, CORTEXA GUARDIAN, which is a combined radar and electrooptics system, which was officially launched to the market in April 2026, already has multiple opportunities now in sales conversion. Sales have already been made in Sweden and the U.K. as counter UAS becomes increasingly mission-critical. In summary, with strong positions across multiple critical technologies, deep customer relationships and a growing international footprint, Roke is well positioned to benefit from the expected U.K. defense upturn and opportunities overseas. So to summarize, operational and trading performance in the first half was in line with our expectations. And despite the headwinds in the U.K. market, we have seen encouraging order inflow in recent months, improving our near-term visibility and reinforcing confidence in the full year. And with 91% of expected 2026 revenue either delivered or in the order book at April 30, our full year expectations remain unchanged. So with growing geopolitical instability, shifting -- driving a shift to high-intensity deterrence and higher baseline defense and national security budgets and with a record order book of GBP 1.4 billion, the outlook is increasingly compelling. Our differentiated capabilities, together with the investments that we are making to expand capacity across our 3 Energetics businesses mean we are well positioned with where our customers are prioritizing their spend. That supports sustained growth across our major markets, and I remain confident that Chemring is well positioned for strong future growth. That concludes this morning's presentation. We'd now be happy to take your questions. Can I ask that you state your name and organization before asking your question. All right. Who's first?

Okay. Ben Bourne, Investec. Mick, can you just talk a little bit more about your confidence in Alloy Surfaces, please, and the potential for a positive outcome?

That's an interesting question. So we've been on quite a journey with Alloy Surfaces, so I'm sure as people in the room will know, so Alloy Surfaces is based in Philadelphia, is NATO's -- well, was NATO's only production capability for pyrophoric decoys. So these are airborne countermeasure decoys. So as you know, we manufacture pyrotechnic decoys, which are the ones that you see coming out which generate a lot of heat and light. Pyrophoric decoys are a different type of technology, but utilized as air protection. And Alloy Surfaces up in Philadelphia was, up until last year, the only producer of those types of pyrotechnics for the whole of NATO. Unfortunately, there was an interruption in the ordering pattern from the U.S. DoD last year, and we had to close the business -- we had to shutter the business because we had insufficient demand. In recent weeks and months, we've been in increasingly conversations with the U.S. Department of War about reactivating and reopening that business to supply pyrophoric decoys, primarily into the U.S. Department of War, but more broadly across NATO into a number of Air Forces that utilize those technologies. We're in discussion with the Department of War at the moment to do that, and we're highly confident that we should have a positive results to these negotiations. Good question. Who's next?

Sash Tusa from Agency Partners. Perhaps I could just follow on, first of all, your answer on Alloy Surfaces. So when you're talking about highly confident of a good resolution, would that potentially include reversing the costs and charges that you incurred in previous years to shut the business? And/or is there any way that rather than this sort of on-off of ordering, that has clearly occurred recently, you could actually get the Department of War/Defense to commit to a take-or-pay situation for Alloy Surfaces? Because otherwise, it's not clear that it's an unmitigated success just to open it for another batch of decoys followed by the same closure process a couple of years down the line?

Yes, it's a good question. Clearly, I can't go into specific details around what we're negotiating at the moment. But the key thrust of your -- of the question of where if we do reactivate and reopen the facility, it will be for a long run as opposed to just another batch. So I think what -- without going to specifics, operation Epic Fury has identified the essential role in platform and protection of pyrophoric decoys plays. And therefore, the Department of War, and this goes to the broader question around defense industrial base, recognizing that the defense industrial base is an integral part of the war fighting capability, not just in the U.S. but across all NATO allies. And therefore, the discussion that we're having with the Department of War is for a long-run period of 3 to 5 years as opposed to just a single batch.

Great. And then just questions on just 2 of your other big contract relationships. The STORM BMD Program, it's quite hard to reconcile the rate of order inflow at the moment with the total scale of the program because otherwise, it's going to be a 6-, 7-, 8-year program at current rates. I fully accept that you can't see into what passes for the mind of MoD. But do you get any indications of whether they are changing the time scale for the program or indeed changing the overall scale of the program? Because otherwise at some stage, just mathematically, you're going to get this enormous slug of business coming in and it's quite hard to work out how you will scale your own business to cope with that.

Yes, that's a good -- that's another good question. So STORM was about GBP 250 million is the overall framework contract and to date...

About GBP 22 million is that first initial call.

So I think it's really difficult, Sash, to, like you say, to look into the MOD's mind and understand how they're going to profile that program. And no doubt as with everything associated with defense procurement here in the U.K., it's caught up in the inevitable discussions around the defense investment plan and whatever. I think the one thing I would say about Storm is, is that integrated air and missile defense of the U.K. Homeland remains right at the top of the priority list from a U.K. defense planning assumptions perspective. And indeed, integrated air and missile defense is one area that we're seeing significant growth across the whole of the group on both sides of the Atlantic.

Jamie Murray from Bank of America. Can you just provide a little bit more color on potential new Energetics CapEx programs? I know previously you've mentioned Germany and the U.K. government. Obviously, the balance sheet is a little bit constrained, so also how you're kind of balancing that?

Yes. I think essentially, it's too early to say at the moment exactly what they could be, given we don't know exactly what the scale of them could be. If you think about what's going on at the moment, the facility in Germany that we're building the blending facility, that's fully funded by the German government. We've just signed an agreement with the U.K. MoD here to start the next phase of the feasibility study for a potential new site, both up in Scotland and capacity addition to our site in Saulsbury as well. But I think at the moment, because we're not sure exactly at the scale of them, I can't give a guidance on CapEx. I think what I would say is in all of these conversations, the conversations that we're having is around supported by grant funding from the governments that we're in discussions with. So it wouldn't be us fully funding these facilities. That's not the intention.

It's Richard Paige from Deutsche Numis. Just a couple for me, please. First one, thank you for the bridge on the second half. Just the bigger chunk is obviously national security, which you said you've seen a recovery. So do you have decent visibility on that order?

Yes. I think we're finding it's very much a customer that seems to have a kind of healthy budget. We're seeing growth in that area, certainly a stabilization and growth in the second half. And so yes, we talk about that GBP 40 million of renewals already this year. We're pretty confident that the rest of them will come through. Remember, these are always work packages that we're currently working on and so it's extending work that we're currently doing rather than kind of new bodies of work.

And again, obviously, the second largest chunk is the product sales. Can you just remind us the sort of typical size of those orders?

Yes. So this is a number of different international countries. Interestingly, the majority will begin with the letter S. And the size is GBP 3 million to kind of GBP 5 million, it's not more than that. So it's certainly not 1 big one, it's a number of smaller ones. And this is for -- there's a small amount of CORTEXA in there, but it's mainly resolved and perceived to these international customers.

And the final one, just you're obviously making fantastic progress on the new capacity that you've already talked -- spoken about. Chicago in place, you're getting Scotland up and running and signing off. Price environment, demand environment has changed quite positively, I would imagine over that period. How are we feeling about the GBP 100 million and GBP 30 million figures that...

Yes, still pretty good. I mean, I think we're certainly on track for them. Like we say, Chicago made really good progress there, delivering against that. The same in Scotland, we're just in the commissioning phase, expect to complete that in '27. And then we're looking to bring the new capacity online in Norway in '28. And yes, you're right, the commercial terms that we're getting are certainly improving as we look forward. And the demand is certainly there. So yes, we're pretty confident.

The market demand for Energetics, whether that's materials or whether it's devices is incredibly strong. So a couple of stats. I think they're in the presentation. But if you look at the business in Chicago, for instance, I think year-to-date, we've submitted 160 proposals to customers on back of customer requests, and we've got another 69 in work. So that gives you a feel. I mean these are hugely elevated levels to what we've seen previously. And I think the team up in Scotland year-to-date, they've submitted 60 proposals to customers. Again, these are funded programs where customers are seeking the key materials and devices that we produce.

And I think in Norway, we've often said, haven't we, we could sell out that capacity that we're building in FY '30 many times over. So we're very confident that there's the demand there for that material.

Ben Varrow, RBC. Just building on that, obviously, there are clear demand -- demand picture is clearly improved for Energetics, but order intake was GBP 52 million in the first half. So how should we think about the timing for those, also -- or the proposals that you've submitted and how that feeds through?

Yes. I mean you just look at the order book in that side of the business, right? I mean it's 95% nearly fully covered this year, over 81% next year and nearly 70% the year after that. I think what we saw last year, we saw some very large order intake in that business. I think it's just timing of further orders. And you can see from our order book, and we're pretty well covered out into the future anyway. And lots of that cover is in the Energetics business. So I wouldn't read anything into the lower order intake in the first half this year on that side.

And then Sensors & Information. The margin, obviously, a big, big step down in the first half, and you mentioned it's tracking better in Q2. So can you give us -- shed some light on the exit rates and the expected margin in the second half?

Yes. So in the second half, so overall in that business, we expect it to get back to a kind of similar margin to last year in the second half. And yes, I think what we've seen in the second quarter is running towards that kind of run rate.

Last one on that bridge as well for H2. There's still some MoD orders within that. I mean, is there still an aspect in terms of the DIP needing to come out for you to hit the numbers or are you relatively comfortable?

I think the -- well, certainly in the second half, there are orders from the U.K. MoD since they are a major important customer for us. And we fully expect to see that those orders will flow whether they flow as part of the DIP itself or whether -- as you see, the MoD are placing orders irrespective of whether DIP is coming out or not, but clearly, it's taking a lot longer and it's far more difficult to get those orders through their approvals process. But we still see that those orders will come through. And the vast majority of those orders are for extensions of programs and frameworks that were already contracted on as opposed to have to go out and win new programs.

David Farrell from Jefferies. A couple of questions for me. Just firstly, on space, obviously, a kind of clear growth area for you. A couple of questions there. Chicago, I think when you announced the expansion, it was probably doing kind of GBP 30-odd million of revenue. You're adding GBP 10 million, but you doubled manufacturing footprint. Could that not scale up to kind of GBP 30 million of incremental revenue over time, therefore?

I mean what we said in that business is we've added that new capacity, and that gives us the space to expand further, should that more demand come through. And we talk about the Middle East and the number of systems that have been utilized there and the increase in the kind of space market. So yes, it certainly gives us the capacity to do that.

And when we expanded -- when we purchased the new facility in Chicago, I think it was about 41,000 square foot of productive capacity. I would say that we're probably using about 2/3 of that at the moment. We purposely purchased the facility of that size because we saw that the demand would continue to increase. So in fact, I was in Chicago not last week the week before. And the team of fully in that new facility is all laid out lean production, manufacturing flow techniques as well. And there is great expansion capability further.

As a percentage of revenue, how much is space?

We don't break down and give the individual components like that. But it's a small but growing percentage of the overall group.

Okay. Mick, you sounded a bit more positive around the kind of profile for countermeasures. And obviously, the order intake was very strong. I think if I look at your kind of medium-term guidance, you expected growth rate is maybe kind of 2% to 3%. Do you think that gets revised higher?

Is what, sorry?

Does that get revised high? Do you think that market can actually grow at kind of mid-single digits?

It might do. Absolutely. Let's see. So we've had an incredibly strong first half with regards to order intake, and there's some interesting trends in air countermeasures and naval countermeasures. So firstly, naval countermeasures so soft kill protection capability on warships is an area that the team here in the U.K. are seeing significant growth. So let's see how that develops. And from an airborne protection perspective, clearly, what you're seeing in operation Epic Fury and the discussion that we had earlier around Alloy Surfaces, I think is bringing back to the fore actually the essentiality of airborne countermeasures capabilities. And the thing that you have to always bear in mind is how sophisticated the missile systems are. You've seen platforms of incredible complexity that have been defeated and brought down in operation Epic Fury, and that just reinforces in defense plan as minds the essentiality of protecting what our increasingly expensive platforms. And even when you see that shift into unmanned platforms and some very expensive high capability and high technology capabilities, those themselves require protection as well.

And sorry, Dave, you rushed through relatively quickly kind of what's going on in Norway. Can you maybe kind of give us a bit more detail in terms of kind of the progress made on the various facilities, revised cost estimates, et cetera?

Yes. Okay. So I don't think you rushed through it. So we've got...

Yes, there's so much going on with it.

I think there is a lot going on. And it's really exciting time. I mean we have so many growth opportunities ahead of us that we have to kind of try and work our way around them. So in Norway, the team are making great progress out there. So the first phase, which was debottlenecking the existing HMX plant, so that's gone incredibly well. I think it's extensively finished, and we're already seeing those benefits flow through there. The second phase is around the NTO facility, and that is the one that we talked to you last time around, we had seen some cost increases on that baseline. And that was driven not by the facility itself, but by all of the enabling infrastructure and utilities that go around that. But that's executing well. In fact, there's a couple of photographs in the deck around that and the buildings are now starting to be completed and then we'll soon move into installing the plant and equipment, and then we'll get into commissioning. So that's going well. And then the third phase which is a further expansion of HMX production. We're in finalizing the detailed design of those facilities and the plant and equipment so that before we start the -- that final construction phase we have a very derisked baseline that we'll be able to execute against. And then obviously, from a Norway perspective, that's the existing site. And as James mentioned, we've been funded a further GBP 16 million by the Norwegian government to go into this concept selection and do far more detailed engineering associated with a second facility, which the Norwegian government are incredibly positive about. So Norway sees high-grade military explosives as one of the key contributions that it is a nation wants to make into the European and NATO alliances with regards to their defense industrial base and therefore, identifying the second site was a major step forward into realizing that ambition. And if you look at those -- that market for high-grade military explosives, so I'm talking about HMX and RDX, not TNT, there's a lot of TNT sites being built. But for high-grade HMX and RDX on this side of the Atlantic, you're looking at one plant, which is [indiscernible] I think the Southeast France owned by Urenco. And then you have to go across to Holston Army Ammunition Plant in Tennessee, which, again, is a U.S. government-owned GoCo operated by BAE systems. So there is a very, very constrained industrial base for high-grade military explosives. And indeed, if you look at what's happening from a warfare and deterrence perspective, utilizing high-grade materials is becoming ever more important, especially when you're looking at what we talked about earlier from a missile perspective of strike missiles. So you've seen everything that's happened in operation Epic Fury. The vast majority of those ordinance utilized materials that we -- or the types of materials that we manufacture in Norway. And also in air defense, so integrated air and missile defense, things like [indiscernible] and whatever, we supply the energetic material from Norway into the 100% of those systems. So I actually think that the whole area -- that there has been a realization in defense planning on both sides of the Atlantic, that real constraints in the supply chain, especially around these types of materials is the structural weak link in so much of the defense planning. And therefore, that's why you're seeing very, very significant governmental support for us to expand capacity. Any more for anyone? No? Okay. Well, thanks very much for joining us today, and we look forward to presenting our FY '26 results in December. Thank you.

Thanks, everyone.