Chemring reveals decline in revenues

Defence technology group Chemring has said revenue in the three months ended January 31st was hit by weaker performances in Countermeasures and Munitions which offset the improved trading performances in Pyrotechnics and Counter-IED.

Defence technology group Chemring has said revenue in the three months ended January 31st was hit by weaker performances in Countermeasures and Munitions which offset the improved trading performances in Pyrotechnics and Counter-IED.

Revenue for the period fell to £136.1m, compared to £132.4m in the prior year.

The group said that despite the general decline in current NATO defence spending, its order book is currently £756.7m, marginally lower than the £760.9m order book at October 31st 2012, after a weak order intake in Munitions was compensated by a stronger order intake in Counter-IED.

Divisionally, quarterly revenue from the Counter-IED business rose 33% year-on-year, boosted in part by a pause in demand for HMDS from the US Department of Defense in the corresponding period last year.

Revenue from Pyrotechnics more than doubled (+110%), but this was offset by a 22% decline in revenue from the Munitions business, which the group said reflected "the weighting of our production capacity towards smoke and illumination rounds for Middle East customers, rather than artillery ammunition".

It added that "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".

The Countermeasures business also suffered a decline, down 30% below the same period last year, primarily as a result of the lower opening order book and production delays at its US Countermeasures businesses, which are expected to be recovered during the course of the year.

Net debt at the end of January was £285.9m, compared to £244.8m at October 31st 2012.

In a statement the group said: "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."

Recommended

Three top-notch Asian stocks to buy
Share tips

Three top-notch Asian stocks to buy

Professional investors Adrian Lim and Pruksa Iamthongthong, managers of the Asia Dragon Trust, pick three of their favourite Asian stocks to buy now.
23 Sep 2022
Why you should short this satellite broadband company
Trading

Why you should short this satellite broadband company

With an ill-considered business plan, satellite broadband company AST SpaceMobile is doomed to failure, says Matthew Partridge. Here's how to short th…
23 Sep 2022
Share tips of the week – 23 September
Share tips

Share tips of the week – 23 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
23 Sep 2022
Momentum investing – and why price matters more than anything else
Investment strategy

Momentum investing – and why price matters more than anything else

The recent fashion for momentum investing, with investors piling into expensive growth stocks, is nothing new, says Merryn Somerset Webb. And the dang…
21 Sep 2022

Most Popular

Beating inflation takes more luck than skill – but are we about to get lucky?
Inflation

Beating inflation takes more luck than skill – but are we about to get lucky?

The US Federal Reserve managed to beat inflation in the 1980s. But much of that was down to pure luck. Thankfully, says Merryn Somerset Webb, the Bank…
26 Sep 2022
Earn 4.1% from the best savings accounts
Savings

Earn 4.1% from the best savings accounts

With inflation topping 10%, your savings won't keep pace with the rising cost of living. But you can at least slow the rate at which your money is los…
27 Sep 2022
The pick of this year's best-performing investment trusts
Investment trusts

The pick of this year's best-performing investment trusts

Market conditions haven’t been easy, but these investment trusts have delivered strong growth, says David Stevenson.
23 Sep 2022