Good momentum into 2020: Trading to 29 February has been in line with expectations: Order intake increased 10% to £132m, with a book-to-bill of 1.25x implying revenues delivered of £106m, or 28% of INVe FY20E revenue (vs 23% in FY19A). This improvement in seasonality is in addition to better order cover: 88% of FY revenue is under cover (vs 86%). Order Book on 29 Feb of £478m represents a 14% increase on the comparative period. Countermeasures & Energetics: FY order cover of 92% (vs 93%), including, in the period, definitisation of a $98.5m (c.£76m) contract at Countermeasures Australia, and a $50m (c.£38m) order to supply the US Air Force and US Navy; both of which help build cover through FY20E and into FY21E. Sensors & Information: FY order cover of 80% (vs 72%) represents a focus on increasing long-term, high-quality, revenues. A further delivery order of $32m (c.£25m) has been made under the HMDS programme of record IDIQ. Roke has secured its first order for its Resolve Electronic Warfare product, from a US customer, achieving a key strategic objective set for FY20. Net debt of £86m: The increase from 31 Oct’19 represents IFRS 16 adoption. No impact from COVID-19: Given Western defence customers, Chemring does not source any components from China (or North Korea or Iran). Chemring’s markets, led by US defence spending, remain highly supportive. Our view: Chemring is delivering on its strategic plan and continues to improve the quality of the Group. In our December note, we explored the “path to 400p”; given today’s positive update, investors may start to attribute a greater probability to this upside scenario. No changes to estimates. Target Price increased: to 275p (from 245p) reflecting peer group multiples. Interim results are due on 3 June 2020