Defence markets are as difficult as ever but signs of growth are emerging, the new Chief Executive of anti-missile flare maker Chemring said on Tuesday.
Michael Flowers, who took over the role from Mark Papworth last month, said trading remained tough in the face of US and European defence spending cuts.
Chemring and its industry peers were having to switch their efforts into research and development for longer-term programmes as the wind-down of operations in war-zones like Afghanistan reduced short-term demand, Flowers said.
"Has the market bottomed out? Impossible to call but it's certainly low," he told ShareCast in an interview at the Farnborough Air Show in southern England.
Flowers said governments and defence customers were pausing to consider what their requirements were likely to be in the longer term.
But he said there were still a lot of threats in the world and they were not reducing.
While operations in Afghanistan are ending, militants have taken over parts of Iraq and violence continues in Syria and the Ukraine.
Although US growth is yet to emerge due to high stocks of flares and other kit, Flowers said Chemring's counter-measures business was starting to see some international growth, including more activity in other NATO countries.
Chemring is trying to import its European technologies to the US via its US business, which should help it to combat US rivals in its bids for US defence contracts.
The group, which also makes sensors to detect roadside bombs and propellant devices for the likes of Britain's Red Devils, is also looking to make use of its defence technology in commercial areas such as roads and railways.
Last month, Papworth quit Chemring as it posted wider half-year losses and warned that foreign exchange
headwinds would continue to hit it in the second half, though its full-year outlook remained "broadly unchanged".
Former Australian army officer Flowers joined BAE Systems in 2001 and became Managing Director of Chemring Australia in 2006.
Flowers, who oversaw the sale of Chemring's European munitions business as it tried to focus on core areas, said he believed the group could achieve some top-line growth in the next three years and bottom-line growth in each of those.
"It's not easy out there but I'm very positive," he said.
Shares in Chemring fell a penny or 0.49% to 202.75p at 13:34 in London.