Interim Results

Chemring Group PLC
13 June 2000


                            CHEMRING GROUP PLC
                               
        Interim Results for the Twenty-Six Weeks ended 28 April 2000


* Profit before taxation trebled to £3,223,000 from £1,095,000      

* Total operating profit doubled to £4,011,000 from £2,089,000    

* EPS increased 168% to 10.02p from 3.74p                           

* Interim dividend of 2.30p, up by 15% increased from 2.00p          

Ken Scobie, Chemring Chairman commented on the results:
 
'Order prospects are encouraging for all business activities and this will
provide sales growth across the Group. The ongoing policy of investment in
new products, combined with cost reductions, is reflected clearly in the
first half performance and is expected to continue.

Our strong strategic position within our respective markets and high order
book gives me confidence that the Group's exciting growth is set to
continue.'


For further information:

David Evans          Chief Executive                    020 7930 0777

Paul Rayner          Finance Director                   020 7930 0777

Peter Gaze           Cardew & Co.                       020 7930 0777



STATEMENT BY THE CHAIRMAN 

All the Group's businesses performed well in the first half. Our continuing
investment in new products and activity related to cost reductions has had a
significant impact on improving the Group's performance. The order book
stands at £59 million, up 62% since the start of the year and with the
opportunities that this brings, I am confident of future growth. 


RESULTS FOR THE 26 WEEKS ENDED 28 APRIL 2000 

Profit before taxation trebled to £3,223,000, from £1,095,000 in the first
half of last year. 

Total operating profit doubled to £4,011,000, from £2,089,000 in the first
half of last year. 

The tax rate is estimated at 26% (1999: 19%). 

Earnings per ordinary share increased to 10.02p, up 168% (1999: 3.74p).

In spite of growth in working capital to support anticipated increased
activity in the second half, operating cash inflow was £3,309,000 (1999:
£2,059,000).  

Interest costs of £788,000 (1999: £994,000) were covered by operating profit
5.09 times (1999: 2.10 times).  

Net debt reduced to £20,856,000 (1999: £21,125,000) representing gearing of
67% (1999: 77%). 


DIVIDEND 
The directors have declared an interim dividend of 2.30p per ordinary share
(1999: 2.00p), up 15%, payable on 16 August 2000 to holders on the register
at 11 August 2000. 


BUSINESS PERFORMANCE 

* DEFENCE BUSINESSES

The defence order book is now £49 million, an increase of 89% from the start
of the year. 

The Countermeasures business performed well in the first half. In the UK
several new products entered the production phase, including two naval rounds
- the UK MoD MK 36 130mm IR round and the innovative combined 130mm RF/IR
round. Deliveries commence this year. Substantial ongoing orders for Tornado
BOZ chaff have been received from a European NATO customer. Operational and
clearance trials, both in Europe and elsewhere in the world, for our airborne
Modular Expendable Block decoy systems have gone very well, with the products
now being specified on several significant helicopter programmes.  

In the US, Alloy Surfaces received initial production orders for flares
developed in support of the Advanced Strategic and Tactical Expendables
programme, where the products will be in service with both US Air Force and
Navy tactical aircraft. The decoy order from the US Navy, announced recently,
will provide good sales growth in the second half. The US BOL IR decoy has
completed its operational acceptance for the US Navy F14 Tom Cat and initial
production orders have been received. Qualification tests for the BOL IR
decoy on the US Air Force F15 are ongoing.  
 
Our overall integrated support and technology expertise within our
Countermeasures business, coupled with our manufacturing capabilities, will
ensure that we are well placed to benefit from any industry restructuring in
this market sector. 

In March 2000 we completed the planned relocation of the Military
Pyrotechnics business into our Derby site. This constrained first half sales,
however, the move has reduced the cost base and these cost savings, along
with a strong order book, will provide good growth in the second half. 

Current international order opportunities are good, helped by increasing oil
prices in the Middle East. Demand for vehicle discharge smoke grenades is
particularly high, and we have received significant export orders for these
products. 

Because of our strength in the UK in both Countermeasures and Military
Pyrotechnics, we are in industry partnership discussions with the UK Ministry
of Defence in support of the smart procurement initiative and improved
logistics support. We believe that the rest of NATO in Europe will follow the
UK lead in this initiative. 


* NON-DEFENCE BUSINESSES

The Marine business is an international market leader in providing legislated
marine safety products to both commercial and recreational markets to aid
location and rescue. Our extensive range of products includes pyrotechnics,
marine electronics and location lights.  
 
Sales of marine electronic products, in particular the award-winning 406
EPIRB, were strong, and the Group benefited from the higher margins that this
new cost-reduced product attracted. We continue to focus on developing
innovative low cost products and in January 2000 a new 406 EPIRB with
integrated GPS was launched. This product has been designed to further
enhance the lifesaving capabilities of conventional beacons to improve the
speed of alert and increase accuracy, typically to within 100 metres. 
 
In addition, a new Manoverboard (MOB) lifebuoy self-activating signal was
introduced in April 2000. The MOB features a proprietary lighting system that
far exceeds the legislated requirements for light output. 
 
There is excellent growth opportunity for electronic products in support of
legislated Global Maritime Distress and Safety Systems, where digital
technology and automatic monitoring by shore stations will significantly
improve safety at sea.  

The Wiring Harness business has benefited from the BAE Systems Military
Aircraft strategic partnership, where it is currently supporting the Hawk and
Tornado mid-life update aircraft programmes. Work on the initial wiring
harnesses for the Nimrod and Eurofighter programmes will also commence
towards the end of this calendar year. We have recently signed a three-year
supply agreement with Rolls-Royce to support them on a range of aero engine
harnesses. 



FUTURE

Order prospects are encouraging for all business activities and this will
provide sales growth across the Group. The ongoing policy of investment in
new products, combined with cost reductions, is reflected clearly in the
first half performance and is expected to continue. 
 
Our strong strategic position within our respective markets and high order
book gives me confidence that the Group's exciting growth is set to continue. 
 
  
K C SCOBIE - Chairman 
13 June 2000 



UNAUDITED CONSOLIDATED PROFIT & LOSS ACCOUNT 
FOR THE 26 WEEKS TO 28 APRIL 2000 

                                                                            
    Audited                                    Unaudited        Unaudited    
    Year to                                  26 weeks to      26 weeks to    
31 Oct 1999                                28 April 2000       1 May 1999    
       £000                                         £000             £000    
                                                                             
                 Turnover                                                    
     62,082      Continuing operations            29,540           29,297    
      3,316      Discontinued operations               -            2,762    
                                                                             
     65,398                                       29,540           32,059    
                                                                             
                                                                             
                 Operating profit/(loss)                                     
      7,766      Continuing operations             4,011            2,858    
     (1,551)     Discontinued operations               -             (769)   
                                                                             
                                                                             
      6,215      Total operating profit            4,011            2,089    
         70      Associated undertaking                -                -    
                                                                             
                                                                             
                 Profit on ordinary                                          
      6,285      activities before interest        4,011            2,089    
     (1,979)     Interest payable                   (788)            (994)   
                                                                             
                 Profit on ordinary activities                               
      4,306      before taxation                   3,223            1,095    
                 Tax on profit on ordinary                                   
       (871)     activities                         (838)            (210)   
                                                                             
                 Profit on ordinary activities                               
      3,435      after taxation                    2,385              885    
     (1,308)     Dividends                          (550)            (473)   
                                                                             
      2,127      Retained Profit                   1,835              412    
                                                                             
      14.49p     Basic earnings per ordinary share 10.02p            3.74p   
                                                                             
                 Diluted earnings per                                        
     13.98p      ordinary share                     9.73p            3.74p   
                                                                             
                 Net dividend per ordinary                                   
      5.50p      share                              2.30p            2.00p   




STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES                               
                                                                             
      Audited                                  Unaudited        Unaudited    
      Year to                                26 weeks to      26 weeks to    
  31 Oct 1999                              28 April 2000       1 May 1999    
         £000                                       £000             £000    
                                                                             
                 Profit on ordinary activities                               
        3,435    after taxation                    2,385              885    
                 Currency translation differences                            
                 on foreign currency net                                     
         (118)   investments                         260              361    
                                                                             
        3,317                                      2,645            1,246    




RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS                           

    Audited                                    Unaudited        Unaudited    
    Year to                                  26 weeks to      26 weeks to    
31 Oct 1999                                28 April 2000       1 May 1999    
       £000                                         £000             £000    

                 Profit on ordinary activities                               
      3,435      after taxation                    2,385              885    
     (1,308)     Dividends                          (550)            (473)   

      2,127                                        1,835              412    

          1      Ordinary shares issued               11                -    
         24      Share premium arising               268                -    
       (118)     Other recognised gains/(losses)     260              361    

      2,034                                        2,374              773    




UNAUDITED CONSOLIDATED BALANCE SHEET
AS AT 28 APRIL 2000

    Audited                                    Unaudited        Unaudited    
      As at                                        As at            As at    
31 Oct 1999                                28 April 2000       1 May 1999    
       £000                                         £000             £000    
                                                                             
                 Fixed assets                                                
     18,795      Intangible assets                18,894           18,892    
     17,219      Tangible assets                  17,845           16,960    
        880      Investments                         880              863    

     36,894                                       37,619           36,715    

                 Current assets                                              
      9,597      Stock                            12,976           10,971    
     17,928      Debtors                          17,237           15,383    
      2,408      Cash at bank and in hand          1,509            1,616    

     29,933                                       31,722           27,970    

                 Creditors due within one year                               
      5,805      Bank loans and overdraft          4,964            5,831    
         44      Loan stock                           44               44    
     14,600      Other                            15,333           13,953    

     20,449                                       20,341           19,828    

      9,484      Net current assets               11,381            8,142    

                 Total assets less                                           
     46,378      current liabilities              49,000           44,857    

                 Creditors due after                                         
    (17,089)     more than one year              (17,337)         (16,769)   
                 Provisions for                                              
       (440)     liabilities and charges            (440)            (500)   

     28,849                                       31,223           27,588    

                 Capital and Reserves                                        
      1,247      Called up share capital           1,258            1,246    
     27,602      Reserves                         29,965           26,342    

     28,849      Shareholders' funds              31,223           27,588    




UNAUDITED CONSOLIDATED CASHFLOW STATEMENT
FOR THE 26 WEEKS TO 28 APRIL 2000

    Audited                                    Unaudited        Unaudited    
    Year to                                  26 weeks to      26 weeks to    
31 Oct 1999                                28 April 2000       1 May 1999    
       £000                                         £000             £000    

                 Net cash inflow from                                        
      5,834      operating activities              3,309            2,059    
                 Fundamental reorganisation                                  
       (494)     of operations                         -             (494)   

      5,340                                        3,309            1,565    

                  Returns on investments and                                 
     (2,006)      servicing of finance              (951)          (1,027)   
       (495)      Taxation                          (592)            (346)   
     (2,842)      Capital expenditure             (1,384)          (1,179)   
      2,813       Acquisitions and disposals           -            2,843    
     (1,186)      Equity dividends paid             (836)            (710)   

                  Cash(outflow)/inflow before use
      1,624       of liquid resources and financing (454)           1,146    
         25       Financing  -  issue of shares      279                -    
                             -  (decrease)/increase                          
        318                     in debt                -              (55)   

      1,967       (Decrease)/increase in cash       (175)           1,091    




INDEPENDENT REVIEW REPORT BY THE AUDITORS 
TO CHEMRING GROUP PLC 

Introduction 
We have been instructed by the Company to review the financial information
for the 26 weeks ended 28 April 2000, and we have read the other information
contained in the interim report and considered whether it contains any
apparent misstatements or material inconsistencies with the financial
information. 

Directors' responsibilities 
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The Listing
Rules of the UK Listing Authority require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes,
and the reasons for them, are disclosed. 

Review work performed  
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board. A review consists principally
of making enquiries of Group management and applying analytical procedures to
the financial information and underlying financial data and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed
in accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly, we do not express an audit opinion on
the financial information.  

Review conclusion 
On the basis of our review we are not aware of any material modifications
that should be made to the financial information as presented for the 26
weeks ended 28 April 2000. 


DELOITTE & TOUCHE, Chartered Accountants, 13 June 2000 
Mountbatten House, 1 Grosvenor Square, Southampton, Hampshire SO15 2BZ 


NOTES TO THE INTERIM STATEMENT                                              


1. SEGMENTAL ANALYSIS OF TURNOVER  
                                         
    Audited                                    Unaudited        Unaudited   
    Year to                                  26 weeks to      26 weeks to   
31 Oct 1999                                28 April 2000       1 May 1999   
       £000                                         £000             £000   

                 Defence                                                    
     25,180      Countermeasures                  11,311           11,248   
                 Military pyrotechnics                                      
     10,616      and explosives                    4,535            5,341   

     35,796                                       15,846           16,589   

                 Non-defence                                                
     16,765      Marine safety                     8,522            8,264   
      7,197      Wiring harnesses                  3,968            3,153   
      2,324      Chemical coatings                 1,204            1,291   

     26,286                                       13,694           12,708   

     62,082      Continuing operations            29,540           29,297   

      3,316      Discontinued operations               -            2,762   

     65,398                                       29,540           32,059   


2. OPERATING PROFIT/(LOSS)                                                 

    Audited                                    Unaudited        Unaudited    
    Year to                                  26 weeks to      26 weeks to    
31 Oct 1999                                28 April 2000       1 May 1999    
       £000                                         £000             £000    
                                                                             
                 Turnover                                                    
     62,082      Continuing operations            29,540           29,297    
      3,316      Discontinued operations               -            2,762    
                                                                             
     65,398                                       29,540           32,059    
                                                                             
                                                                             
                 Gross profit                                                
     17,097      Continuing operations             9,043            8,098    
      1,252      Discontinued operations               -              785    
                                                                             
     18,349                                        9,043            8,883    
                                                                             
                                                                             
                 Net operating expenses                                      
     (9,331)     Continuing operations            (5,032)          (5,240)   
     (2,803)     Discontinued operations               -           (1,554)   
                                                                             
    (12,134)                                      (5,032)          (6,794)   
                                                                             
                                                                             
                 Operating profit/(loss)                                     
      7,766      Continuing operations             4,011            2,858    
     (1,551)     Discontinued operations               -             (769)   
                                                                             
      6,215                                        4,011            2,089    


3.    1999 RESULTS 
The figures for the year to 31 October 1999 are abridged from the Group's
full Financial Statements for that period which carry an unqualified
Auditors' Report and have been filed with the Registrar of Companies. 


4.     CORPORATE WEBSITE 
Further information on the Group and its activities can be found on the
corporate website at www.chemring.co.uk 


5. DIVIDEND DATES

The interim dividend of 2.30p per ordinary share will be paid on 16 August
2000 to holders on the register at 11 August 2000.  The ex dividend date will
be 7 August 2000.