Pre-tax profit plunges 78 per cent at Chemring

FTSE 250-listed countermeasure production company Chemring has posted 'disappointing' preliminary results for the year ending October 31st, acknowledging a pre-tax profit decline of 78 per cent to 18.8m pounds.

FTSE 250-listed countermeasure production company Chemring has posted 'disappointing' preliminary results for the year ending October 31st, acknowledging a pre-tax profit decline of 78 per cent to 18.8m pounds.

The company, which develops pyrotechnics for the aerospace and military defence sectors, reported a 35% decline in its underlying operating profit as well as a 43% reduction in underlying earnings per share to 28.5p.

The group posted a marginal increase in its overall revenue rising to £740.3m from £724.1m a year earlier.

Underlying operating profit declined to £88.3m from £135.8m a year earlier and the underlying operating margin declined by seven percentage points to 12% from 19%.

Hickson: "difficult market conditions expected to stay in place in 2013"Peter Hickson, Chemring Group Chairman, commented: "2012 was a particularly disappointing year for the business, characterised by uncertainty in our markets and a number of factors that disrupted our operational performance. These difficult market conditions are expected to remain in place in 2013, with defence spending in the US, UK and Europe likely to remain under significant pressure.

"However, following the appointments of Mark Papworth as Chief Executive and Steve Bowers as permanent Finance Director, we now have the leadership in place to address the operational issues that contributed to our recent underperformance."

Reorganising business on the cardsHe added: "The emphasis in 2013 will be on driving operational performance efficiency, and reorganising the business to create efficiency, resilience and more focussed business development, during what will be a difficult period for the defence industry. In parallel, cash, cost management and debt reduction will be absolute priorities across the group, all with the ultimate aim of returning Chemring to profitable growth."

MF

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