Interim Management Statement

RNS Number : 7388Y

Chemring Group PLC

27 February 2013

 



FOR IMMEDIATE RELEASE                                                                                27 FEBRUARY 2013

CHEMRING GROUP PLC

INTERIM MANAGEMENT STATEMENT

Chemring Group PLC ("Chemring" or "the Group") today issues its Interim Management Statement covering the period from 1 November 2012 to date, as required by Rule 4.3 of the Disclosure and Transparency Rules of the UK Listing Authority.

Current trading

Revenue from continuing operations during the first three month period was £136.1 million, compared with £132.4 million in the prior year. Improved trading performances in Pyrotechnics and Counter-IED were offset by weaker performances in Countermeasures and Munitions. Despite the general decline in current NATO defence spending, the Group's order book is currently £756.7 million, marginally lower than the £760.9 million order book at 31 October 2012. A weak order intake in Munitions was compensated by a stronger order intake in Counter-IED, where significant orders were awarded in the period, including a contract for Joint Services Lightweight Standoff Chemical Agent Detectors (US$28.5 million) with the US Army and a contract for the provision of Husky Mounted Detection System ('HMDS') Ground Penetrating Radar (US$32 million) with the US Army. 51.6% of the order book at the end of January 2013 was for delivery in the current financial year.

Counter-IED

Revenue from our Counter-IED business in the quarter was 33% higher than for the same period last year, when there was a pause in demand for HMDS from the US Department of Defense. The solid order intake in the period included the award to NIITEK of a contract for HMDS systems, together with spares and training, for the Spanish Army.

Countermeasures

Revenue at our Countermeasures business was 30% below the same period last year. This was primarily as a result of the lower opening order book and production delays at our US Countermeasures businesses, which are expected to be recovered during the course of the year.

Pyrotechnics and Munitions

Revenue in our Pyrotechnics business increased by 110% compared with the same period last year, whilst revenue at our Munitions business was 22% lower than the same period last year, reflecting the weighting of our production capacity towards smoke and illumination rounds for Middle East customers, rather than artillery ammunition. Order intake at our Munitions business continues to be impacted by delays in the placing of major contracts and by the granting of export licences.  

Current financial position

The Group's net debt at the end of January 2013 was £285.9 million (31 October 2012: £244.8 million, 31 January 2012: £316.9 million). The Group continues to closely manage cash and working capital balances.

Outlook

As outlined at the Group's preliminary results release on 24 January 2013, although budget uncertainties continue to impact wider market confidence across the Group's US, UK and European defence markets, Chemring remains focused on driving improvements in its operational performance and restructuring its businesses in order to provide the Group with greater resilience.

An update on progress made against the key priorities for 2013, as outlined at the Group's preliminary results release, will be given alongside Chemring's interim results in June 2013. 

-ENDS-

For further information:

Mark Papworth	Chief Executive, Chemring Group PLC	01489 881880
Steve Bowers	Finance Director, Chemring Group PLC	01489 881880
Rupert Pittman	Group Director of Communications and Investor Relations, Chemring Group PLC	01489 881880
Andrew Jacques James White	MHP Communications	0203 128 8100

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.

Notes to Editors

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

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

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

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

www.chemring.co.uk

 

END

 

 

IMSBCGDDSSDBGXL