TIDMCHG
RNS Number : 9323B
Chemring Group PLC
28 February 2011
FOR IMMEDIATE RELEASE 28 FEBRUARY 2011
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
2010 to date, as required by Rule 4.3 of the Disclosure and
Transparency Rules of the UK Listing Authority.
Current Trading
Trading during the first three month period to the end of
January 2011 was 38% higher than for the same period in 2010, when
calculated on a constant currency basis. This was driven by
continued strong growth in our Counter-IED and Munitions businesses
that was partially offset by a reduction in revenues from our
Pyrotechnics activities.
The Group's order book has increased to a new record of GBP944
million, 64% higher than at this time last year. This strong order
book and the continued growth in three of our four core business
segments provide a solid foundation for 2011, and the Board remains
confident that the outlook remains in line with its
expectations.
Counter-IED
Our Counter-IED business continued to perform well, with revenue
increased by 150% compared with the same period in 2010. A major
component of this growth was provided by our US subsidiary,
Non-Intrusive Inspection Technology, Inc. ("NIITEK"), with further
increased deliveries of systems, spares and sustainment for the
Husky Mounted Detection Systems ("HMDS") ground penetrating radar
used by the US Army, US Marine Corps, and Canadian armed
forces.
Countermeasures
Our Countermeasures business showed steady growth, with revenue
15% higher than for the same period last year. Our UK
countermeasures subsidiary achieved much higher levels of sales
than last year as a result of increased development funding for the
next generation of naval countermeasures and more benign winter
weather conditions that have made lot acceptance testing easier for
delivery of our conventional flare products. This was partially
offset by reduced production at Alloy Surfaces, which has been
adversely affected by the continuing delays in approval of the
current US Department of Defense budget.
The restart of production at Kilgore, following the incident on
the MJU-7 decoy assembly line last September, has now been
completed, and revenue in the period grew by more than 10% compared
to the previous year. All but one production line is back to full
volume, although it will be at least four months before the
replacement building for the MJU-7 flare is completed.
Munitions
Our Munitions business increased its revenue by 78% compared
with last year, although most of this growth was generated by our
recent Belgian acquisition, Mecar. The majority of these sales were
to Middle Eastern countries unaffected by the recent political
unrest.
Pyrotechnics
Revenue in our Pyrotechnics business reduced by 40% compared
with last year, principally caused by deliveries scheduled for
January slipping into the second quarter. In particular, our
Italian subsidiary, Simmel, was unable to deliver any of its mortar
illumination rounds to UK customers because of an unexpected delay
in the delivery of a key sub-system from one of our suppliers as
the result of transport paperwork problems. This shortfall is
expected to be recovered by the half year.
Current Financial Position
On 14 January 2011, the Group completed a refinancing of
unsecured working capital facilities, which provide funding to
April 2015.
Cash flow in the first quarter of the financial year was in line
with management expectations, and the Group's net debt at the end
of January stood at GBP339 million (January 2010: GBP241 million).
The net debt is expected to reduce by the half year.
For further information:
Dr David Price Chief Executive, Chemring Group PLC 01489
881880
Paul Rayner Finance Director, Chemring Group PLC 01489
881880
Rupert Pittman Cardew Group 0207 930 0777
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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