FY trading in-line: Trading to 31 October is in-line with expectations (cons. adj. operating profit: £67.0m, INVe £66.7m). FY23 y/e net debt is expected to be £14.4m (previous: INVe £1m) largely due to £9m deployed into the £50m buyback and increase in working capital from the delay in the US DoD approving certain countermeasure deliveries, as previously flagged. Operating cash conversion remained a healthy 90% of EBITDA (3yr average: 101%). Energetics growth: Customer requirements are driving significant demand for niche energetics and in October, Chemring Nobel won >£40m of orders and Chemring Energetic Devices (US based subsidiary) secured a $46m order from United Launch Alliance for the Vulcan Centaur Rocket. Incremental capex: We update our net debt estimates for a further c£30m capex to expand capacity at Chemring Nobel in Norway announced today. This is due to significant increases in demand. Total investment in the three Energetics businesses over next three years is now expected to be c£120m, generating increased revenue of c£85m and operating profit of c£21m. We believe customer restocking in traditional capabilities has barely begun. US Sensors strategic review: The Explosive Hazard Detection business will be discontinued resulting in a £31m non-cash impairment of goodwill (acquired in 2009). Also, an impairment of £18m in relation to capitalised costs for AVCAD is recorded. The Group has moved quickly to reposition the US Sensors business and focus on the competitive advantage in biological detection (two sole source programs) will be positive for margins. Valuation: The shares trade on a CY24E EV/EBIT discount of 16% to international defence peers despite a higher margin profile. BUY reiterated.