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Chemring Group PLC (CHG)

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Tuesday 03 November, 2020

Chemring Group PLC

Trading Update

RNS Number : 0019E
Chemring Group PLC
03 November 2020
 

FOR IMMEDIATE RELEASE          3 NOVEMBER 2020

 

 

CHEMRING GROUP PLC ("Chemring", the "Group" or the "Company")

 

CONTRACT AWARDS AND FINANCIAL YEAR-END UPDATE

 

Contract awards

Chemring is pleased to announce that in the final month of its financial year, its UK subsidiary, Chemring Countermeasures UK ("CCM UK"), has been awarded contracts worth £25.8m from the UK MOD to develop and supply naval countermeasures in support of the Royal Navy. Deliveries under these contracts will be made in FY21 through to FY23.

 

CCM UK has also received a £5.5m contract from the UK MOD to manufacture air countermeasures in support of the UK armed forces . Deliveries under this contract will be made during FY21 and FY22. All work under these contracts will be performed at CCM UK's Salisbury facility.

 

These countermeasures play a critical role in protecting air and naval forces from the threats posed by heat-seeking and radar-controlled missiles.

 

Year-end update

With continued positive momentum across the Group, trading for the year ending 31 October 2020 ended robustly. The Board's expectations are for adjusted operating profit to be at the top end of current market expectations.*

The continued focus on the management of working capital, cash generation and the reduction of intra-period net debt volatility has delivered positive results. Net debt at year end is now expected to be approximately £48m which includes £6.5m in respect of the first time adoption of IFRS16 (2019: £75.7m), driven by operating cash conversion of 110% of EBITDA, together with lower finance and tax payments.

The closing order book of £476m (2019: £449m) gives excellent visibility of FY21 revenue in both segments.

 

COVID-19 update

The health, safety and well-being of our people, their families, our customers and the communities in which we operate remain our first priority. All our facilities remain open, are operating in accordance with Government and State guidelines, and are applying stringent safeguards to minimise the spread of the virus. To date, our supply chain has remained robust and we have maintained deliveries of essential products and services to our customers.

FY20 results

Chemring's FY20 results are scheduled to be announced on 15 December 2020.

 

-ENDS-

 

* The current range of analyst expectations for adjusted operating profit for FY20 is £47m to £53m.

 

For further information:

Rupert Pittman  Group Director of Corporate Affairs,  01794 833901

  Chemring Group PLC 

 

Andrew Jaques   MHP Communications  0203 128 8100

James Bavister

 

 

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 FTSE250 global business that specialises in the manufacture of high technology products and the provision of services to the aerospace, defence and security markets

· Employing approximately 2,500 people worldwide, and with production facilities in four countries, Chemring meets the needs of customers in more than fifty countries

· Chemring is organised under two strategic product segments: Sensors & Information and Countermeasures &  Energetics

· Chemring has a diverse portfolio of products that deliver high reliability solutions to protect people, platforms, missions and information against constantly changing threats

· Operating in niche markets and with strong investment in research and development ("R&D"), Chemring has the agility to rapidly react to urgent customer needs

 

www.chemring.co.uk

 

 

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