We have ensured there is renewed emphasis on communicating
safety at every level, and on auditing our activities to ensure
robust compliance. We have implemented a Safety Leadership
Programme for all executives, managers and supervisors, aimed at
further enhancing our safety culture and embedding safety at the
core of our business. Additionally, we have undertaken a review of
our operations to ensure our controls reflect best practice,
particularly regarding the handling of, and exposure to, energetic
materials. Ongoing investment in safety remains our first
priority.
Strategy and organisation
A strategic review was completed in 2013, resulting in the
divestment of a number of assets in our former Energetic
Sub-Systems and Pyrotechnics & Munitions segments during the
year. This has resulted in the Group being more focused on the
sectors where we are, or can become, market leader. The divestments
enabled early repayment of long-term debt, strengthening Chemring's
balance sheet. In turn, this has increased our resilience and
created greater flexibility to pursue growth opportunities. Our
focus remains on maintaining and growing our leading position in
Countermeasures, securing orders in Sensors & Electronics
whilst positioning for future US Programs of Record, and driving
operational excellence in Energetic Systems.
Operations
In looking to the year ahead, it is critical that we consolidate
the operational gains made in 2014, particularly at Chemring
Energetic Devices and Chemring Ordnance. Delivery performance at
Chemring Energetic Devices improved markedly in the second half,
with margins returning to acceptable levels, and Chemring Ordnance
returned to profitability on the back of consistent manufacturing.
At Kilgore, where the 2014 emphasis has been on safety culture and
production quality, we must now also focus on operational
efficiency in order to drive margins. Throughout our operations,
scope exists for further incremental improvements as we share best
practice.
Markets and strategic outlook
The global defence market remains subdued and, while the recent
trend of substantial declines in defence spending has concluded, US
operational funding continues to reduce. Whilst there has been
growth in some markets, notably the Middle East, these regions are
still modest in scale when compared to NATO defence spending.
Current geopolitical tensions have led to claims that defence
expenditure will increase, particularly for items in Chemring's
portfolio. Although we are able to ramp-up quickly in support of
customer requirements, we are not yet witnessing any wholesale
increase in demand.
Outlook
Good progress was made in 2014 with the Group continuing to make
structural and financial improvements. As a result, Chemring is now
a focused defence technology business with established core
competencies in Countermeasures, Sensors & Electronics and
Energetic Systems.
While the trading environment remains challenging, Chemring has
gained a number of research and development contracts that position
the Group for long-term US Programs of Record, particularly in
Sensors & Electronics. During this research and development
phase, our immediate priority is securing crucial production orders
for US Sensors & Electronics products in NATO and the Middle
East to offset the pause in manufacturing for the US Department of
Defense ("US DoD"). Overall, the outlook for 2015 is unchanged
though the timing of Sensors & Electronics contracts is
expected to lead to the result being weighted towards the second
half.
Board of directors
Michael Flowers was appointed to the Board on 24 June 2014, when
he replaced Mark Papworth as Group Chief Executive. Vanda Murray,
who joined the Board as a non-executive director on 1 November
2011, has said she will not be seeking re-election and will stand
down at the Group's Annual General Meeting on 19 March 2015.
Trading summary
Revenue from continuing operations was GBP403.1 million (2013:
GBP472.3 million) and, including discontinued operations, was
GBP474.9 million (2013: GBP624.9 million). This revenue generated
an underlying operating profit of GBP49.0 million (2013: GBP72.1
million), of which GBP46.7 million (2013: GBP56.3 million) related
to continuing operations. Including non-underlying items, there was
a total operating loss of GBP28.2 million (2013: GBP36.9
million).
Including discontinued operations, underlying profit before tax
reduced by 41.3% to GBP30.3 million, resulting in underlying
earnings per share of 12.4p (2013: 21.2p).
The continuing operations' order book increased by GBP85.0
million in the second half of the year. As a result, the closing
order book for continuing operations was GBP486.8 million (2013:
GBP494.9 million).
The Group's net debt was GBP135.6 million (2013: GBP248.7
million), with the reduction principally resulting from the receipt
of disposal proceeds.
Group results
An analysis of underlying and total results is set out
below:
2014 2014 2013 2013
Underlying Total Underlying Total
GBPm GBPm GBPm GBPm
-------------------------- ----------- ------ ----------- ------
Revenue
- continuing operations 403.1 403.1 472.3 472.3
- discontinued operations 71.8 71.8 152.6 152.6
-------------------------- ----------- ------ ----------- ------
474.9 474.9 624.9 624.9
-------------------------- ----------- ------ ----------- ------
Operating profit/(loss)
- continuing operations 46.7 25.4 56.3 (46.7)
- discontinued operations 2.3 (53.6) 15.8 9.8
-------------------------- ----------- ------ ----------- ------
49.0 (28.2) 72.1 (36.9)
Net finance expense (18.7) (30.7) (20.5) (20.5)
-------------------------- ----------- ------ ----------- ------
Profit/(loss) before tax 30.3 (58.9) 51.6 (57.4)
Tax (6.4) 4.0 (10.6) 9.1
-------------------------- ----------- ------ ----------- ------
Profit/(loss) after tax 23.9 (54.9) 41.0 (48.3)
-------------------------- ----------- ------ ----------- ------
The use of underlying measures, in addition to total measures,
is considered by the Board to improve comparability of business
performance between periods. Underlying measures referred to are
stated before costs relating to acquisitions and disposals,
business restructuring and incident costs, profit/loss on disposal
of businesses, items deemed to be of an exceptional nature,
impairment of goodwill and acquired intangibles, impairment of
assets held for sale, amortisation of acquired intangibles and
gains/losses on the movement in the fair value of derivative
financial instruments. A reconciliation of underlying and total
operating profit is set out in note 4.
During the year, changes in foreign exchange rates, principally
the appreciation of sterling against the US dollar, reduced
reported revenue from continuing operations by GBP19.8 million. At
constant exchange rates, revenue from continuing operations was
GBP422.9 million, a reduction of 10.5%.
Following the divestments completed during the year, in
particular the sale of the European munitions businesses,
Chemring's operating segments were revised to better reflect the
Group's composition. Those businesses still owned by the Group from
within the former Pyrotechnics & Munitions segment have been
combined with those from the Energetic Sub-Systems segment to form
a new segment, Energetic Systems. Continuing operations include
3d-Radar, acquired in May 2014, and Chemring Energetic Devices'
Clear Lake facility that was divested in January 2014.
An analysis of segmental revenue and underlying operating profit
reflecting these new segments is set out below:
2014 2014 2013
Underlying Underlying Underlying 2013 Underlying
2014 operating operating 2013 operating operating
Revenue profit margin Revenue profit margin
GBPm GBPm % GBPm GBPm %
------------------------ -------- ----------- ----------- -------- ----------- ---------------
Countermeasures 96.1 9.7 10.1 125.0 13.2 10.6
Sensors & Electronics 154.4 31.9 20.7 211.3 44.7 21.2
Energetic Systems 152.6 15.0 9.8 136.0 8.5 6.3
------------------------ -------- ----------- ----------- -------- ----------- ---------------
403.1 56.6 14.0 472.3 66.4 14.1
Unallocated corporate
costs - (9.9) - - (10.1) -
------------------------ -------- ----------- ----------- -------- ----------- ---------------
Continuing operations 403.1 46.7 11.6 472.3 56.3 11.9
Discontinued operations 71.8 2.3 3.2 152.6 15.8 10.4
------------------------ -------- ----------- ----------- -------- ----------- ---------------
Including discontinued
operations 474.9 49.0 10.3 624.9 72.1 11.5
------------------------ -------- ----------- ----------- -------- ----------- ---------------
Chemring (LSE:CHG)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Chemring (LSE:CHG)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024
