DISPOSAL OF MARINE INTERESTS

RNS Number : 7343E

Chemring Group PLC

06 June 2012

 



FOR IMMEDIATE RELEASE                                                                                    6 JUNE 2012

CHEMRING GROUP PLC

 DISPOSAL OF MARINE INTERESTS

Chemring Group PLC ("Chemring" or the "Group") today announces the sale of its marine interests (collectively "Chemring Marine" or the "Company") to Drew Marine ("Drew Marine") for £32 million, payable in cash.

Completion, which is conditional upon regulatory approvals and subject to a working capital adjustment, is expected by the end of July. The proceeds after costs will be used by the Group to reduce net debt, initiate a share buy-back, and to fund existing pension liabilities of around £2 million.

Chemring Marine is the world's leading supplier of marine pyrotechnic distress signals to the commercial and leisure marine markets, but is no longer considered to be core to Chemring and its wider international defence strategy. In the year ended 31 October 2011, the Company generated revenues of £21 million, an operating profit of £6 million, and had gross assets of £17 million.

Drew Marine is a recognised global leader in the supply of marine water treatment, maintenance, welding and refrigeration, fuel treatment and fire, safety and rescue products and services to ship owners, ship managers and shipyards. Drew Marine was acquired in 2009 by J.F. Lehman & Company, a leading middle-market private equity firm focused on the maritime, aerospace and defence sectors.

Dr. David Price, Chief Executive of Chemring, said, "I am pleased to announce the sale of Chemring Marine to Drew Marine. We have developed our maritime business into the clear world leader but its future in the commercial and leisure sectors is no longer aligned with the growth strategy for the Group. Chemring believes that Chemring Marine will benefit from new owners who will provide the investment needed to expand its marine safety business and to develop its global maritime safety network."

Len Gelosa, President and Chief Executive Officer of Drew Marine, said, "Chemring Marine's global leadership position is synonymous with quality, performance and reliability - all attributes shared by the products and services offered by Drew Marine.  We are excited about the prospects for the Pains Wessex, Comet and other well-known Chemring Marine brands as they join Drew Marine's portfolio. In addition, we add a new distribution model to Drew Marine's capabilities, which should allow us to broaden our customer base and explore additional products suitable for the Company's global distributor network."

For further information:

Dr David Price	Chief Executive, Chemring Group PLC	01489 881880
Paul Rayner	Finance Director, Chemring Group PLC	01489 881880
Rupert Pittman	Director of Communications and Investor Relations, Chemring Group PLC	01489 881880
Anthony Cardew/ Emma Crawshaw	Cardew Group	07971 468 308

Notes to Editors:

• Chemring is a manufacturing business with facilities in eight countries selling high technology electronics and energetic products to over eighty countries worldwide.

• The Group has a diverse portfolio of products protecting military people and platforms against a constantly changing threat.

• Operating in high margin, niche markets with short product development timescales, Chemring has the agility to rapidly react to urgent customer needs.

• Chemring adopts a balanced strategy of organic growth and small bolt-on acquisitions, and maintains balanced geographic and market profiles, with a growing presence in non-NATO countries.

• Strong R&D investment for new products and improvements in technology continually allows Chemring to expand its addressable markets.

www.chemring.co.uk

The Chemring Marine Business

The world's leading supplier of SOLAS, MED & USCG approved marine distress signals to the commercial and leisure marine markets, under the brand names Pains Wessex and Comet. Available through over 200 distributors in more than 80 countries, Chemring Marine Group's comprehensive range of products are specified by the world's navies, merchant fleets, fishing vessels, rescue services, airlines and leisure craft alike. Products include signalling smoke and flares, rockets and line throwers.

Cautionary Statement:

This announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Chemring's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are; increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approvals for engineering or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects.

Chemring undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.

 

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