Chesterfield Special Cylinders Holdings Expects FY25 EBITDA Ahead of Market Forecasts

Revenue growth, profitability and cash: the quality of the improvement

Revenue grew from £14.8 million to approximately £16.5 million – roughly an 11% increase based on the “approximate” figures provided. More importantly, the business swung to positive adjusted EBITDA of about £0.8 million, showing operational traction despite the completion of certain UK naval builds.

The move from £0.9 million net borrowings to £2.1 million net cash – a £3.0 million swing – is a clear positive. It points to improved profitability and/or working capital control, which is particularly encouraging in project-led environments where cash can be volatile.

Defence order book and FY26 outlook: why the setup looks constructive

Management describes the defence order book as robust (no figures disclosed) and highlights “significant opportunities” in the UK hydrogen market. The company’s active engagement with hydrogen developers for new build storage and transport systems suggests potential contract flow into FY26.

Guidance tone is upbeat: the group says these factors underpin a positive outlook for further earnings growth in FY26. While numbers are not provided at this stage, the combination of a healthy defence pipeline, record Integrity Management activity and growing hydrogen involvement reads well for forward momentum.

Why this update matters for investors

• Proof of resilience: Overseas defence and services growth offset the expected taper in UK naval new build. That diversification is working.
• Quality tilt: Record Integrity Management revenue hints at a larger recurring or repeatable services component, which tends to support margins and cash conversion.
• Hydrogen optionality: Engagement with UK hydrogen developers could translate into new build contracts. It is an option on growth in a nascent, policy-supported market.
• Balance sheet strength: Net cash of £2.1 million reduces risk and improves strategic flexibility for bids, working capital and potential capex.

Balanced view: positives and the watch-list

Positives to lean into

• EBITDA ahead of market expectations (consensus not disclosed) demonstrates operational progress.
• Record years in Integrity Management and hydrogen indicate demand across both services and energy transition niches.
• Robust defence order book supports near-term visibility, with overseas exposure a useful offset to UK-specific timing.
• Meaningful turnaround in net cash underlines better financial health.

What to watch

• Order intake and conversion: The update references robust orders and significant hydrogen opportunities, but no numbers. Watch the FY25 prelims for order book detail.
• Margins by mix: With UK naval new builds winding down, gross margin trajectory will depend on the blend of overseas defence, services and hydrogen projects.
• Working capital: Project timing can move cash around. The prelims should help explain the £3.0 million swing to net cash.
• Exceptional costs: Adjusted EBITDA excludes exceptional items. Clarity on any adjustments will matter for underlying profitability.
• Capacity and lead times: Hydrogen new builds can be engineering-heavy. Any commentary on operational capacity and delivery schedules would be useful.

What to expect on 18 December

The company plans to release FY25 preliminary results on Thursday 18 December. Here is what I will be looking for:

• Order book disclosure by segment (defence, Integrity Management, hydrogen) and geography.
• EBITDA bridge: year-on-year drivers, including pricing, mix, and overhead discipline.
• Cash flow detail: working capital movements, capex and any one-offs.
• Hydrogen pipeline: the size, timing and nature of engagements with “key developers”, and any contract wins.
• FY26 commentary: whether management tightens its positive outlook into qualitative or quantitative guidance.

Bottom line: steady execution with upside optionality

This is a tidy update. Chesterfield has nudged EBITDA into positive territory ahead of expectations, grown revenue, and flipped to net cash, all while UK naval new builds taper. Defence demand remains a strong foundation, services are hitting records, and hydrogen adds a credible growth angle.

There are still moving parts – orders need to convert, and margins need to hold as mix shifts – but the setup into FY26 looks constructive. The prelims in December should fill in the gaps on order book depth, cash dynamics and hydrogen traction.