BAE Systems and Rolls-Royce are the two most popular UK defence shares. And for good reason – both are well established FTSE 100 companies that are delivering strong returns for investors.
There are a number of small-cap UK defence stocks that have delivered far higher returns over the last six months, however. Here are three to check out.
Advanced space technology
First up, we have Filtronic (LSE: FTC), which is up about 50% over the last six months. This is a technology company that specialises in advanced wireless communication solutions.
It’s had a lot of success in recent years selling wireless components to SpaceX. It’s now having success selling satellite and sensor hardware to defence businesses.
For example, in December, the company won a £11m contract with a major defence prime. “This latest win deepens our engagement with a key European defence customer and strengthens Filtronic’s position in the defence sector, a growing market for the group,” said CEO Nat Edington at the time.
After its recent run up, this stock looks a little expensive. The forward-looking price-to-earnings (P/E) ratio is now over 50 – this doesn’t leave any room for an operational setback (eg the loss of a key customer).
Taking a five-year view, however, I see a lot of potential. So, I think the stock is worth considering.
Nuclear radiation protection
Next, we have Kromek (LSE: KMK), which is up about 150% over six months. It provides nuclear radiation detection solutions to the global defence and security markets.
Its product portfolio ranges from personal, handheld, and wearable devices to systems that can be mounted on remotely operated vehicles (ROVs) or drones. Note that the company has worked in partnership with the US Department of Defense’s Defense Threat Reduction Agency (DTRA) and the Defense Advanced Research Projects Agency (DARPA) to develop high quality products and solutions that meet the needs of leading players in the defence and security industries.
I think this company has a lot of growth potential and is worth a closer look. It could do well in the years ahead as governments spend more on defence (note that sales in its chemical, biological, radiological, and nuclear defence (CBRN) segment more than doubled in the first half of the current financial year).
That said, this is a very small business and profits could be up and down. So, the stock could be volatile.
Rugged computing products
Finally, we have Concurrent Technologies (LSE: CNC), which is up about 50% over six months. It makes rugged high-performance computing products designed for the defence and aerospace markets.
This company has a lot of momentum at present. In January, it told investors that it generated double-digit growth for 2025 and that total order intake for FY25 was a record £47m (versus £41m in 2024).
It added that it has started 2026 with good momentum, underpinned by robust customer demand, record order intake, and a growing pipeline of design wins that are expected to convert into production revenues. This all sounds very promising.
The forward-looking P/E here is about 35, so again, we have an expensive stock that doesn’t have a lot of room for error. However, with earnings per share expected to grow by around 20% this year, it could still be worth a look.
