TIDMCHG
RNS Number : 0473S
Chemring Group PLC
27 November 2012
FOR IMMEDIATE RELEASE 27 November 2012
CHEMRING GROUP PLC
Trading Update
Chemring Group PLC ("Chemring" or "the Group") today provides an
update on trading having entered the close period in respect of its
preliminary results for the financial year ended 31 October
2012.
Trading
The Group's performance during 2012 was extremely disappointing.
Chemring's operational performance has been weak, and management of
investors' expectations over the past year has also been poor. In
part, this resulted from a failure to anticipate the likely impact
of the changing market dynamics on the Group's businesses, but also
reflected failures in performance at several of our businesses.
Expectations for the Group's trading performance for the
financial year ended 31 October 2012 remain in line with the
trading update issued on 1 November 2012. The following further
detail is subject to final audit.
Trading in the final quarter was impacted by the issues set out
in the 1 November 2012 trading statement that principally affected
the Countermeasures and Munitions business segments. As a result,
turnover for the financial year ended 31 October 2012 is expected
to be approximately GBP740 million (2011: GBP725 million).
The year end order book of approximately GBP760 million compares
to GBP878.3 million at the prior year end.
Financial position
There was a significant operating cash inflow in the final
quarter that resulted in net debt at the year end of approximately
GBP250 million. (2011: GBP262.7 million).
Market conditions
Defence spending in the US, UK and Europe is expected to remain
under significant pressure.
The US defence market remains vulnerable to ongoing budget
uncertainties, particularly around sequestration and the impact of
a six month continuing resolution from 1 October 2012. The threat
of sequestration continues to have a negative impact on customer
behaviour, and there is a lack of clarity about defence expenditure
in the medium term. As a result, we are seeing delays in the
procurement process whilst customers await greater visibility and
certainty as to their future budgets.
The UK MoD's review of its procurement process continues to
result in delays to the start of new programmes and reduced funding
for existing ones whilst, in Europe, ongoing deficit reduction
programmes are exerting downward pressure on defence spending,
leading to uncertainty in the procurement process and delayed
programme implementation.
Chemring's non-NATO markets continue to offer opportunities,
although order intake remains subject to the granting of export
licence approval, which is proving more difficult to achieve in
some markets.
Outlook
The wider market backdrop is likely to remain challenging.
Chemring needs to adapt and better equip itself in order to meet
these challenges.
Mark Papworth joined Chemring as Chief Executive Officer on 5
November 2012, and brings significant experience of delivering
performance improvement and implementation of strategic change in
the manufacturing, technology and service sectors. He will present
his initial views on Chemring and his operational priorities at the
Group's preliminary results which are expected to be announced on
24 January 2013.
- Ends -
A conference call for analysts and investors will be held at
08.30 GMT today. Dial-in details are as follows:
Participant dial in: +44 (0)20 3140 0668 (toll) / 0800 368 1950 (toll free)
PIN: 475152#.
A playback facility will be available for 30 days. Dial-in
details are 020 3140 0698/0800 368 1890
PIN: 388348#
For further information:
Chemring Group PLC:
Rupert Pittman Director of Communications 01489 881 880
& Investor Relations rupertp@chemring.co.uk
MHP Communications:
Andrew Jaques / John Olsen / James White 0203 128 8100
chemringplc@mhpc.com
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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