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.

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."