Disposal

FOR IMMEDIATE RELEASE 15 DECEMBER 2006

                              CHEMRING GROUP PLC                               

                    DISPOSAL OF MARINE ELECTRONICS BUSINESS                    

Chemring Group PLC ("Chemring") announces that it has agreed a conditional sale
of its McMurdo marine electronics business (the "Marine Electronics Business")
to Signature Industries Limited ("Signature"). Following receipt of a cash
deposit of £0.25 million, £2.8 million will be paid in cash at completion and
deferred contingent consideration of up to £1.5 million will be paid in
December 2007. Chemring will retain approximately £1.0 million net of trade
debtors and creditors relating to the Marine Electronics Business, which will
be collected in due course. The proceeds will be used to reduce net debt.

The Marine Electronics Business, which is a division of Chemring's UK-based
subsidiary, McMurdo Limited, manufactures and supplies marine electronic
survival products for both commercial and leisure marine markets.

In the year to 31 October 2005, the Marine Electronics Business made an audited
operating loss, before restructuring costs, of £1.3 million on sales of £6.5
million. The gross assets of the Marine Electronics Business at 31 October 2005
were £8.0 million. The loss on disposal, before accounting for deferred
contingent consideration, is in the region of £3.9 million. The deferred
contingent consideration, which is based on prospective sales of the Marine
Electronics Business for the year to 31 October 2007, will be accounted for
when the cash is received.

Completion, which is conditional upon the transfer of certain product
approvals, is expected to take place in the first quarter of 2007.

Chemring is also taking this opportunity to make a £1.5 million write down in
respect of a residual product line which is not being sold with the Marine
Electronics Business, and a goodwill impairment charge of £1.1 million
associated with ICS Electronics Limited, the remaining business in the Marine
division.

Dr David Price, Chief Executive of Chemring, commented: "I am pleased to
announce the sale of our marine electronics business to Signature, which is
already well-established in the military survival products market. The combined
entity will become a leading supplier to the marine beacon market. The disposal
and associated write-offs detailed above complete our strategy to divest our
marine electronics activities. This, together with the disposal of our marine
lights business which was completed in June 2006, will realise cash of
approximately £7.0 million (before receipt of any deferred contingent
consideration), which will be reinvested in our core businesses of
countermeasures and energetics."

For further information:


Dr David Price, Chief Executive Chemring Group PLC 01489 881880

Paul Rayner, Finance Director Chemring Group PLC 01489 881880

Rupert Pittman Cardew Group 0207 930 0777