TIDMCHG
RNS Number : 3172N
Chemring Group PLC
17 January 2019
17 JANUARY 2019
CHEMRING GROUP PLC
RESULTS FOR THE YEARED 31 OCTOBER 2018
As reported At 2017 exchange
rates
2018 Change 2018 Change 2017
Continuing operations
Revenue GBP297m -3% GBP306m - GBP307m
Underlying EBITDA(*) GBP50m -9% GBP51m -7% GBP55m
Underlying operating GBP31m - GBP32m +3% GBP31m
profit(*)
Underlying profit
before tax(*) GBP25m + 25% GBP26m +30% GBP20m
Statutory loss before GBP(22)m GBP(7)m
tax
Underlying earnings
per share(*) 6.9p + 17% 5.9p
Dividend per share 3.3p + 10% 3.0p
Net debt GBP82m + 2% GBP80m
Key points
-- Underlying operating profit(*) flat at GBP31m, reflecting the
impact of the incident at our UK Countermeasures site in August
offsetting growth in US countermeasures
-- Strategic decision announced on 15 November 2018 to exit
commodity Energetics businesses; classified as discontinued and
held for sale resulting in impairment charges of GBP69m. Year end
order book of these businesses was GBP68m (2017: GBP153m)
-- Net debt flat year on year, reflecting good operational cash
generation, offset by the start of the investment in the Tennessee
facility and the impact of the incident at our UK Countermeasures
site. Net debt : EBITDA of 1.64x and pension fund in IAS19
surplus
-- Contract awards on US counter-IED, Chemical and Biological Detection Programs of Record
-- Order book of the continuing business at year end of GBP394m
(2017: GBP325m), increase driven by growth in Energetics and US
Countermeasures. GBP242m currently due as revenue in FY19,
approximately 70% coverage of FY19 targeted revenue
-- Board recommending a final dividend of 2.2p per ordinary
share, giving a total dividend of 3.3p per ordinary share (2017:
3.0p)
-- Board's expectations for 2019 performance remain unchanged,
again with a significant H2 weighting
Michael Ord, Chemring Group Chief Executive, commented:
"2018 was a mix of financial and operational progress, offset by
the impact of the incident at our Countermeasures site in August.
We ended 2018 in line with our revised expectations. Our trading
since the start of the current financial year has been in line with
the Board's expectations across all businesses.
Since joining the Group six months ago, I have been impressed by
the technological spread that Chemring has and the strength of our
positions in many of our markets. I have also been struck by the
depth of technical capability within our workforce. I have and will
continue to place the greatest emphasis on safety. Protecting our
people, customers and communities has to be at the heart of what we
do.
With high technology products and market leading positions
Chemring has the platforms for long-term future growth. We have
already achieved a number of significant milestones on the journey
to build a stronger business and will continue to focus our efforts
on re-structuring, simplifying and strengthening the business in
order to capitalise on our significant market opportunities.
I am excited about the prospects of the Group and look forward
to making further progress in 2019."
Notes:
*The principal Alternative Performance Measures ("APMs")
presented are the underlying measures of earnings which exclude
discontinued operations, exceptional items, gain or loss on the
movement on the fair value of derivative financial instruments, and
the amortisation of acquired intangibles. The directors believe
that these APMs improve the comparability of information between
reporting periods. The term underlying is not defined under IFRS
and may not be comparable with similarly titled measures used by
other companies.
All profit and earnings per share figures in this announcement
relate to underlying business performance (as defined above) unless
otherwise stated.
A reconciliation of underlying measures to statutory measures is
provided below:
Group - continuing operations: Underlying Non-underlying Statutory
EBITDA (GBPm) 50.0 (27.2) 22.8
----------- --------------- ----------
Operating profit/(loss) (GBPm) 31.0 (46.9) (15.9)
----------- --------------- ----------
Profit/(loss) before tax (GBPm) 24.9 (46.9) (22.0)
----------- --------------- ----------
Tax charge (GBPm) (5.7) (13.1) (18.8)
----------- --------------- ----------
Profit/(loss) after tax (GBPm) 19.2 (60.0) (40.8)
----------- --------------- ----------
Basic earnings/(loss) per share
(pence) 6.9p (21.5)p (14.6)p
----------- --------------- ----------
Diluted earnings/(loss) per share
(pence) 6.7p (21.3)p (14.6)p
----------- --------------- ----------
Group - discontinued operations:
----------- --------------- ----------
Profit/(loss) after tax (GBPm) 6.2 (71.2) (65.0)
----------- --------------- ----------
Segments - continuing operations:
----------- --------------- ----------
Countermeasures EBITDA (GBPm) 23.6 (10.8) 12.8
----------- --------------- ----------
Countermeasures operating profit/(loss)
(GBPm) 12.1 (16.3) (4.2)
----------- --------------- ----------
Sensors EBITDA (GBPm) 18.5 (0.7) 17.8
----------- --------------- ----------
Sensors operating profit (GBPm) 15.3 (10.1) 5.2
----------- --------------- ----------
Energetics EBITDA (GBPm) 16.0 - 16.0
----------- --------------- ----------
Energetics operating profit (GBPm) 11.8 (4.8) 7.0
----------- --------------- ----------
The adjustments to continuing operations comprise:
-- amortisation of acquired intangibles of GBP11.6m (2017:
GBP12.1m)
-- exceptional items of GBP4.1m (2017: GBP2.1m) relating to
acquisition and disposal related costs
-- exceptional items of GBP8.1m (2017: GBP14.0m) relating to
business restructuring costs
-- exceptional items of GBP12.8m (2017: GBP0.4m) relating to
legal costs
-- exceptional items of GBP1.7m (2017: GBPnil) relating to the
costs associated with the change of Chief Executive
-- exceptional items of GBP0.8m (2017: GBPnil) associated with
the GMP pension equalisation court ruling
-- exceptional items of GBP7.4m (2017: GBPnil) relating to the
impairment of product development costs
-- loss on the movement in the fair value of derivative
financial instruments of GBP0.4m (2017: GBP1.7m gain)
-- impact of US Tax Cuts and Jobs Act and tax credit on
adjustments GBP13.1m (2017: GBP6.1m credit)
The discontinued operations profit after tax comprises:
-- operating profit of GBP8.0m (2017: GBP23.9m)
-- exceptional items of GBP69.3m (2017: GBP9.8m) relating to the
impairment of the carrying value of discontinued businesses now
held for sale
-- amortisation of acquired intangibles of GBP2.7m (2017:
GBP2.9m)
-- release of provisions in respect of previously disposed
businesses of GBPnil (2017: GBP3.0m credit)
-- tax charge on the above of GBP1.0m (2017: GBP3.3m)
Further details are provided in notes 3 and 4.
For further information:
Group Director of Corporate Affairs, Chemring
Rupert Pittman Group PLC 01794 833901
Andrew Jaques
Nessya Hart
Luke Briggs MHP Communications 020 3128 8100
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.
Notes to editors
-- Chemring is a global business that specialises in the
manufacture of high technology products and the provision of
services to the aerospace, defence and security markets
-- Employing approximately 2,500 people worldwide, and with
production facilities in four countries, Chemring meets the needs
of customers in more than fifty countries
-- Chemring is now organised under two strategic product segments: Sensors & Information, and Countermeasures & Energetics
-- Chemring has a diverse portfolio of products that deliver
high reliability solutions to protect people, platforms, missions
and information against constantly changing threats
-- Operating in niche markets and with strong investment in
research and development, Chemring has the agility to rapidly react
to urgent customer needs
www.chemring.co.uk
Presentation and photography
The presentation slides and a live audio webcast of the
presentation to analysts will be available at the Chemring Group
results centre www.chemring.co.uk/investors/results-centre at 09.30
(UK time) on 17 January 2019. A recording of the audio webcast will
be available later that day. Original high-resolution photography
is available to the media by contacting Luke Briggs, MHP
Communications: luke.briggs@mhpc.com / tel: 020 3128 8100.
Group overview
In 2018 the Group made progress on its roadmap to deliver
long-term growth and a more sustainable business model, and in the
final quarter of the year made encouraging progress on the targeted
US programs in counter-IED and chemical and biological detection.
However, on 10 August an incident occurred in a flare mixing
building at our UK Countermeasures site in which two colleagues
were injured, one fatally. Production at the site was immediately
suspended and an investigation launched into the cause of the
incident.
The injured colleague continues to make good progress and the
Group is committed to supporting him and his family throughout his
recovery, along with the family of our colleague who lost his life
in the incident.
The incident at our UK Countermeasures site serves as a reminder
that elements of our manufacturing processes involve the use of
hazardous materials. We shall continue to invest in safety and in
automation in order to remove personnel from exposure to
hazard.
The Board is fully committed to the goal of zero harm.
Following the closure of our UK Countermeasures site, and in
close collaboration with the regulatory bodies, a phased restart of
non-energetic material production and the shipment of finished
goods inventory was commenced. The resulting impact of the incident
on the Group's FY18 result was to reduce revenue by GBP22m and
underlying operating profit by GBP17m. 2019 will be a year where
the site focuses on gradually increased activity levels.
Elsewhere, the Group has made good progress on its strategy to
move away from commoditised product lines to focus on higher margin
and more predictable revenue streams. In light of this, the Board
announced on 15 November 2018 that it had decided to exit the
commoditised Energetics business, these businesses have therefore
been treated as discontinued activities and shown as held for
sale.
Two years ago, and following the rights issue that strengthened
the Group's balance sheet, we reported that ongoing execution
against the US Programs of Record within the Sensors segment,
combined with a slow but steady ramp up of F-35 Joint Strike
Fighter countermeasure requirements, were key to future growth. It
was therefore pleasing to see the progress made in year against
these goals.
Given some of the items mentioned above and a review of a number
of balance sheet items, all announced on 15 November 2018, these
FY18 results reflect non-underlying items, primarily non-cash, of
GBP131m. These results provide disclosure on the various items and
necessitate the disclosure of adjusted, continuing and discontinued
figures which makes the disclosure more extensive. The Board
believes these actions are necessary and part of us building a
stronger business for the future.
Safety
Our goal is a zero harm environment, this is not set as a
statistical target, but as a moral imperative that will be achieved
through establishing a Generative Safety Culture, with three focus
areas of People, Plant and Process.
In September 2018, we commissioned an independent safety review
of all our sites, which assessed in-depth our culture, management
systems and practises. As a result of this review, we have
introduced a completely new Health and Safety strategy and plan, in
order to ensure that we become a more proactive organisation with
an even greater focus on prevention not cure; enabling us to better
identify in advance potential hazards and to put in place
mitigations in order to reduce the probability of an incident
occurring. This strategy will also deliver a more consistent way of
managing safety across our organisation, particularly the control
of major hazards.
Chief Executive's Review
I became Chief Executive on 1 July 2018 and spent my first six
months visiting all our businesses and meeting as many colleagues
and customers as possible. I have been impressed by the
technological spread that Chemring has and the strength of our
positions in many of our markets. Most of all I have been struck by
the depth of technical capability within our workforce. I have
placed the greatest emphasis on safety, to ensure that everyone
goes home safely at the end of the day. Protecting our people,
customers and communities has to be at the heart of what we do.
Chemring is a technology-rich company with an international
footprint and a breadth of market leading products and services. It
occupies niche market positions and has strong, long-term
relationships with its customers. These provide a strong platform
for future growth, however, we will only achieve this success by
complete commitment to our purpose, which is to relentlessly
innovate to protect our customers. Our strategy is to deliver
profitable growth by operating in markets where we have
differentiators such as intellectual property, niche technology,
expertise, high barriers to entry, and by investing in innovation
to meet our customers' needs.
Going forward, we will focus our efforts on strategy, structure
and our culture.
Strategy:
The Board concluded that the Group would exit the low margin
commoditised Energetics businesses located in Derby and Florida,
where contracts are often lumpy. On 15 November 2018 the Group
announced its intention to treat these businesses as discontinued
operations, and that within the Energetics segment our future focus
should be on the niche specialist energetic materials businesses in
Chicago, Scotland and Norway, where we have strong intellectual
property and high barriers to entry.
This strategic move will simplify the Group and enable greater
focus and investment. It will improve the quality of the Group and
its earnings.
My review also concluded that in parts Chemring still maintains
a federated business model with limited collaboration. As a
consequence of this there are a mix of processes and standards
across the Group. The opportunity therefore exists to re-structure,
simplify, and build a stronger group that can capitalise on the
significant market prospects that exist.
Structure:
In future we will be organised under two sectors - Sensors &
Information, and Countermeasures & Energetics. Future
disclosure will be of these two sectors, rather than the current
three segment approach.
The focus within each sector is clear:
In Sensors & Information we have world-leading technologies
and incumbent supplier advantage, having secured positions on major
long-term US Programs of Record. We now need to move successfully
through technical qualification to large scale manufacture in the
years ahead and to organise ourselves and invest accordingly. We
will also look beyond these near-term programs and contracts and
develop our plans to exploit our incumbent position for the longer
term. We must utilise our capabilities in adjacent markets and
across geographies by innovating and recognising our customer's
needs before they do. The Board believes that the Sensors &
Information sector offers the greatest opportunities for
significant sustainable growth and attractive margin
performance.
Following the proposed divestment of the commodity Energetics
business, in Countermeasures & Energetics we will also have
world-leading technologies and incumbent supplier advantage. We are
the number one global countermeasures supplier and will invest to
improve the quality and safety of our operations and match rising
customer demand. We occupy niche positions in specialist
energetics, often on long-term programmes, where long-term supply
agreements are in place. We will invest to protect these positions
and seek, over time, to safely improve our operating margins.
Culture:
We have strengthened the leadership team both in the UK and the
US. We have already begun the move to standardise our processes and
standards. An Operational Framework, that defines both what we
should do at Chemring, and how we should do it, has recently been
put in place. This Operational Framework is the reference source to
all mandated policies across the Group. It incorporates our values,
our policies and procedures, and provides the necessary governance
to enable us to operate in a safe, consistent and accountable
way.
The longer-term potential
We have already achieved a number of significant milestones on
the journey to build a stronger business and will continue to focus
our efforts on re-structuring, simplifying and strengthening the
business in order to capitalise on our significant market
opportunities. After success in building a stronger business our
longer-term focus will increasingly move to further enhancing the
Group's growth potential and delivery thereon.
Markets
Global defence budgets are growing at 2-3% per year but military
investment in specific capabilities varies much more widely. New
capabilities to meet new perceived threats, such as electronic
warfare and cyber, are growing. Others, such as countermeasures,
are subject to catch-up funding, and others are declining as
military needs are changing. Our strategy is to target growing
niches within the defence and security markets, based on our
detailed understanding of customers' new and emerging needs and
targeted investment in innovation, largely in the Sensors
segment.
The US is the world's largest defence market and our US
businesses are well positioned to benefit from this growing defence
budget.
The FY19 National Defense Authorization Act was passed in August
2018. The base budget of $617bn for FY19 "Begins recovery from over
$400bn on lost capability" arising from the Bipartisan Budget Acts
in 2011, 2013 and 2018 (source: US Defense Budget Briefing
presentation February 2018). The President's Budget Request also
projects steady growth of 4% per year out to 2021 to sustain
personnel increases in all four services, major equipment
programmes, such as the F-35 and investments in technology
innovation.
Several of the identified technology innovation initiatives
align with Chemring's Group-wide capabilities in Electronic
Warfare, Autonomy, Cyber, Artificial Intelligence and Space.
The countermeasures market is starting to show some positive
signs with an increase in solicitation, bid activity and orders
received throughout the year, particularly within the US. The
broader global countermeasures market remains more robust with
improving levels of activity in the UK and the rest of the
world.
Customer budgets for Roke's security services are rising, as are
ongoing development efforts in support of US Programs of Record in
the counter-IED, chemical and biological detection markets.
Contract awards for new sensors products have been achieved during
the year under a number of US Programs of Record.
Within Energetics, the Group is seeing a medium-term trend of
increased demand for specialist products, particularly for
applications in the space, missile, aerospace and high explosive
materials markets, balanced by a decline in the more
commodity-based pyrotechnics and ammunition markets.
Group Financial Performance
The Group's financial performance was in line with the summary
provided in the announcement released on 15 November 2018.
The underlying operating profit from continuing operations of
GBP31.0m (2017: GBP31.5m) resulted in an underlying operating
margin of 10.4% (2017: 10.3%). The flat margin primarily reflects
the financial impact of the Salisbury incident which offset a
richer margin mix from a combination of operational improvement and
the operational gearing in the US Countermeasures business.
Foreign exchange translation has had a limited impact on
year-on-year comparison. On a continuing constant currency basis,
restating the current year at the FY17 average exchange rate,
revenue would have been GBP305.5m and underlying operating profit
would have been GBP31.9m.
Total finance expense fell significantly to GBP6.1m (2017:
GBP11.3m). This was driven by the repayment of expensive private
placement loan notes in November 2017 and the focus on reducing
intra period working capital volatility.
This left an underlying profit before tax from continuing
operations of GBP24.9m (2017: GBP20.2m). The effective tax rate on
the underlying profit before tax from continuing operations was
22.9% (2017: 18.3%). The underlying earnings from continuing
operations per share was 6.9p (2017: 5.9p).
Statutory operating loss from continuing operations was GBP15.9m
(2017: GBP4.6m profit) and after statutory finance expenses of
GBP6.1m (2017: GBP11.3m), statutory loss before tax from continuing
operations was GBP22.0m (2017: GBP6.7m), giving statutory loss per
share from continuing operations of 14.6p (2017: 1.5p). The
statutory loss from discontinued operations was GBP65.0m (2017:
GBP10.9m profit), giving a statutory loss of GBP105.8m (2017:
GBP6.6m profit) from continuing and discontinued operations. A
reconciliation of underlying to statutory profit measures is
provided in note 3. The non-underlying costs relate to the
amortisation of acquired intangibles, deferred consideration on
acquisitions, legal costs associated with the ongoing
investigations, the write off of assets and demolition costs at the
Tennessee site, the costs associated with the change of Chief
Executive and the revaluation of deferred tax assets in the USA
following the new tax legislation enacted in December 2017. In
addition, following a strategic product portfolio review the Group
has recognised an impairment charge of GBP7.4m in respect of
certain products where capitalised development costs are no longer
considered fully recoverable.
Revenue from discontinued operations fell to GBP138.6m (2017:
GBP240.4m) and underlying operating profit fell to GBP8.0m (2017:
GBP23.9m) primarily as a result of the lower levels activity on
40mm and NSA product lines. A review of the carrying value of the
businesses held for sale resulted in an impairment of GBP69.3m
(2017: GBP9.8m). This is based on the current market conditions in
the military and law enforcement commodity ammunition and
pyrotechnics market.
Finance expenses
Following the repayment of GBP51.4m of private placement loan
notes in November 2017, the total finance expense fell to GBP6.1m
(2017: GBP11.3m).
Total finance expenses included interest costs of GBP4.7m (2017:
GBP8.5m), amortisation of debt finance costs of GBP1.3m (2017:
GBP2.4m) and other non-cash finance expenses associated with the
defined benefit pension scheme of GBP0.1m (2017: GBP0.4m).
Tax
The continuing statutory tax charge totalled GBP18.8m (2017:
GBP2.4m credit) on a continuing statutory loss before tax of
GBP22.0m (2017: GBP6.7m). The increase in the continuing effective
rate of tax on the results of the Group is primarily due to
recently enacted US tax legislation that reduces the US corporate
tax rate, thus reducing the rate of our deferred tax asset, and
changes the rules regarding US interest tax deduction limitations.
In addition, the rate is impacted by the geographic mix of profits,
changes to the amounts of deferred tax assets considered
recoverable in respect of both tax losses and prior year
adjustments.
The continuing underlying tax charge totalled GBP5.7m (2017:
GBP3.7m) on a continuing underlying profit before tax of GBP24.9m
(2017: GBP20.2m). The effective tax rate on underlying profit
before tax for the year is a charge of 22.9% (2017: 18.3%).
The US Tax Cuts and Jobs Act ("TCJA") was substantively enacted
on 22 December 2017. The TCJA provides for a reduction in the main
rate of US federal corporate income tax from 35% to 21% for the
period after 1 January 2018, thus first affecting Chemring for part
of its 2018 financial year, however the impact on the deferred tax
asset has been recognised in full during 2018.
The impact on Chemring has been two-fold; the reduction in the
main rate of US federal corporate income tax has resulted in a
write-off of deferred tax of GBP8.6m associated with tax losses and
interest restrictions, offset by a GBP3.9m credit on the
revaluation of the deferred tax liabilities associated with US
related acquired intangibles. This has resulted in a net write-off
of GBP4.7m in respect of the rate change. In addition, the
introduction of restrictions on the availability of interest
deductions has resulted in a write-off of deferred tax of GBP12.7m.
The total impact of GBP17.4m has been treated as a non-underlying
item in 2018, see note 3.
The discontinued underlying tax charge was GBP1.8m (2017:
GBP4.4m) on an underlying profit before tax of GBP8.0m (2017:
GBP23.9m).
Earnings per share
Underlying earnings per share from continuing operations were
6.9p (2017: 5.9p) and diluted underlying earnings from continuing
operations per share were 6.7p (2017: 5.8p).
Total underlying basic earnings per share were 9.1p (2017:
12.9p) and the statutory basic loss per share was 37.8p (2017: 2.4p
earnings).
Segmental review - Countermeasures
Performance
The incident at our UK Countermeasures site in August 2018 has
affected our 2018 reported results, reducing revenue by
approximately GBP22m and underlying operating profit by
approximately GBP17m.
Countermeasures revenue increased by 1% to GBP126.0m (2017:
GBP125.3m) and the segment reported an underlying operating profit
of GBP12.1m (2017: GBP14.4m), down 16%. This decline was driven by
the Salisbury incident (see above) and to a much lesser extent a
softer year in Australia and masked the improvement achieved in the
US business. Underlying operating margins fell to 9.6% from
11.5%.
On a constant currency basis, revenue would have increased by 4%
to GBP130.7m and underlying operating profit would have fallen 12%
to GBP12.7m.
Order intake in the year has been strong with significant orders
for both air and naval countermeasures received from UK MOD,
international and US customers in particular. The Group's new
Special Material Decoy continues to progress and there is evidence
of growth in market share.
The year saw significant development on the F-35 program, with
our $12m Low Rate Initial Production ("LRIP") 6 contract for the
F-35 operational flares now completed. The $15m LRIP 7 contract was
awarded and delivery commenced in the year. The contract for LRIP 8
is expected to be awarded later in the year and will be delivered
from our Tennessee facility. Our Australian facility is currently
bidding an F-35 contract directly with the US Navy, the outcome of
which is expected in the first half of 2019.
Opportunities and outlook
After a number of years of weakness in the countermeasures
markets that followed the end of the Iraq and Afghanistan
conflicts, the outlook for the segment is increasingly positive.
Segment focus remains on maintaining and growing the Group's market
leading position, in particular on key platforms such as the F-35
as it begins to enter service in increasing numbers, and in the
important Special Material Decoy market as older programmes decline
in volume.
During the year the Board approved a project to invest in the
Tennessee facility. The project, which is expected to take
approximately three years to complete, will result in an automated
capability with additional capacity reflecting expected customer
demand over the medium term. The majority of the investment will be
capital, but some demolition, remediation work, asset and inventory
write-offs have been expensed in 2018 as non-underlying costs. This
investment, which is expected to safeguard and expand the Group's
position in the global countermeasures market, will provide the
Tennessee site with a fully automated production line. This is not
expected to affect the site's ability to deliver product in 2019.
The original budget was approximately $50m and this is under review
as plans are refined and issues addressed as the work commences.
This will contribute to higher Group capital expenditure over the
next two years. Group capital expenditure on 2019 is expected to be
in the range of GBP40m-GBP50m.
Our Australian facility will close in H1 2019 to be fitted and
qualified for F-35 production. As such we expect little
contribution from Australia in 2019, but it should exit the year
with an F-35 qualified production facility.
The phased restart of our UK Countermeasures site is in
progress. We are working with the appropriate regulatory
authorities to agree a phased restart plan across the different
activities on site. As such, 2019 is planned to be a year where the
site progressively gets back to being fully operational. Revenue
and operating profit contribution is still expected to be lower
than expected before the incident took place. For 2019 our current
assumption is that the site will contribute approximately GBP30m of
revenue and break even after accounting for insurance recoveries
and remediation costs. Further investment in automation at the
Salisbury site is being evaluated.
Countermeasures' order book at 31 October 2018 was GBP182.8m
(2017: GBP178.6m) and at constant currency the order book would be
1% higher than at 31 October 2017. Of the 31 October 2018 order
book, approximately GBP116m is currently expected to be delivered
in 2019, of which GBP92m can be delivered from our US and
Australian facilities.
With a solid order book in place, 2019 trading performance for
Countermeasures is expected to be positive, albeit with a
significant bias towards the second half as Salisbury progressively
re-starts and Australia is re-fitted and qualified.
Segmental review - Sensors
Performance
Sensors revenue decreased by 4% to GBP87.3m (2017: GBP91.2m)
reflecting a good year at Roke, the continued focus of the US
business on the research and development phases of the counter-IED,
chemical and biological detection Programs of Record and a weaker
year in the Electronic Warfare ("EW") market as the timing of
customer orders was delayed. The segment reported an underlying
operating profit of GBP15.3m (2017: GBP13.4m). Underlying operating
margins increased to 17.5% (2017: 14.7%). Order intake was
GBP109.2m, a 15% increase on the prior year.
On a constant currency basis, revenue would have fallen 3% to
GBP88.8m and underlying operating profit would have increased by
16% to GBP15.5m.
Key developments in the year were customer decisions on major US
Programs of Record.
The US DoD's counter-IED program, through the Husky Mounted
Detection System ("HMDS") program gave rise to two significant
milestones. The award of both a $14m development contract and a
3-year $93m Indefinite delivery, indefinite quantity ("IDIQ")
sole-source contract, with an initial delivery order of $23m, were
in line with our expectations of the program which has moved to one
of spiral development, with concurrent development, trialing, and
manufacturing to be undertaken. We expect this program to run for
the next decade providing a recurring level of business as the US
Army moves to its objective of producing and fielding a fleet of
369 HMDS by mid-2021. The new fleet will be comprised of both
refurbished and new HMDS and this activity will run alongside
technology upgrade programs.
The Joint Biological Tactical Detection System ("JBTDS") program
moved into the Biological Point System Assessment phase in March
2018. The DoD will undertake testing of our product for the next
12-18 months, after which we expect a production decision.
We bid and won a second biological program, the Enhanced
Maritime Biological Detection System ("EMBD"), where the customer
is the US Navy. This was a competitive bid and our initial contract
award for Engineering Manufacturing Development ("EMD") and LRIP
was in the form of a $24m IDIQ, with an initial delivery order of
$14m. The program is expected to be worth up to $100m over 5-10
years once in full rate production.
The Next Generation Chemical Detector Program saw two of the
three phases make contract decisions. Chemring won an award under
NGCD 1 (now known as Aerosol and Vapor Chemical Agent Detector -
"AVCAD"). This award is in the form of an IDIQ contract. The
initial EMD and LRIP phase is expected to be worth approximately
$16m in the period to 2022. Following this the customer is expected
to have a requirement of approximately $800m. Chemring is one of
two contractors selected for this program.
The cyber-security market, in which Roke is a leading
participant, was buoyant in the year. Roke's focus on investing in
its people ensures it has the right mix of skills to meet market
requirements and has supported its success and revenue growth in
the year.
During the year Chemring disposed of its 3d-Radar business, but
retained the rights to use the technology in the military
market.
Opportunities and outlook
The focus for Sensors continues to be on expanding the Group's
product, service and capability offerings in the areas of tactical
electronic warfare and cyber-security, and securing positions on
the US DoD Programs of Record.
After a year of significant bid activity in the US, focus now
turns to the execution phase for the contracts we have been
successful on. Mobilisation has started, with some initial
deliveries in 2018, but the focus of 2019 will be ensuring the
Virginia and North Carolina facilities are mobilised and resourced
to deliver the AVCAD, EMBD, JBTDS and HMDS contracts.
Supporting the UK Government across National Security and
Defence, and non-governmental industries in high-value
manufacturing and infrastructure, Roke will continue to focus on
their customers' missions: to enable them to deliver competitive
advantage, defend their people, assets and secrets, and defeat
their adversaries. With a focus on emerging technologies in
connectivity, cyber, automation and data analytics, Roke will
deliver research, design, engineering and advisory services using
its high quality people and capabilities. Concurrently, Roke is
seeking to expand its capabilities into commercial and
international markets.
The order book for Sensors at 31 October 2018 was GBP75.4m
(2017: GBP53.2m).
2019 trading performance for Sensors is expected to show an
improvement on 2018, driven primarily by initial deliveries under
the HMDS awards.
Segmental review - Energetics
Performance - continuing operations
Revenue for Energetics decreased by 7% to GBP84.1m (2017:
GBP90.6m), while underlying operating profit decreased by 16% to
GBP11.8m (2017: GBP14.1m), giving an underlying operating margin of
14.0% (2017: 15.6%). The planned closure of the Torrance facility
and integration into a modernised Chicago facility has caused some
operational disruption, which has delayed some revenues into 2019.
On a constant currency basis, revenue would have fallen 5% to
GBP86.0m and underlying operating profit would have fallen 15% to
GBP12.0m.
Chemring's high explosive manufacturing business in Norway has
again achieved record order intake levels with significant effort
being undertaken to enhance capacity. This investment is supported
by a strategy of engaging customers in long-term agreements for
supply, which has proved successful with a number of customers
moving to this arrangement to secure their continuity of
supply.
Performance - discontinued operations
Revenue for the discontinued Energetics business decreased by
42% to GBP138.6m (2017: GBP240.4m), while underlying operating
profit decreased by 67% to GBP8.0m (2017: GBP23.9m), reflecting the
decline in 40mm ammunition and non-standard ammunition ("NSA")
revenue in 2018.
The expected decline in performance was due to the completion of
the large 40mm ammunition contracts to customers in the Middle
East. The final shipment under this contract was completed early in
the year therefore 40mm ammunition only contributed GBP11.2m (2017:
GBP64.2m) to revenue in the year.
Sales of procured NSA product fell in the year. Due to the
externally sourced nature of the products involved, margins on NSA
sales are significantly lower than for manufactured product. Supply
of NSA products to the US Government contributed GBP81.9m (2017:
GBP97.6m) to revenue in the year.
Opportunities and outlook
The Group's niche propellant and devices businesses in Scotland
and Chicago are increasingly securing long-term contracts with
customers supporting greater short and medium-term visibility and
providing a framework for long-term planning and investment
decisions. Similarly, demand for high quality high explosives has
enabled Chemring Nobel in Norway to work proactively with its
customer base on long-term contracting models, providing much
improved visibility.
The order book for the continuing Energetics businesses at 31
October 2018 was GBP135.5m (2017: GBP93.4m). 2019 trading
performance for the continuing Energetics businesses is expected to
show an improvement on 2018, driven primarily by the completion of
the site consolidation at our facility in Chicago.
The order book for the discontinued Energetics businesses at 31
October 2018 was GBP68.2m (2017: GBP152.8m) and included GBPnil in
respect of 40mm ammunition and GBP27.1m in respect of NSA.
Net debt and cash flow
The Group's net debt at 31 October 2018 was GBP81.8m (2017:
GBP80.0m), representing a net debt : underlying EBITDA (continuing)
ratio of 1.64x (2017: 1.46x). The financial condition of the Group
has improved in a number of aspects during the year. Debt
repayments were made which reduces future interest costs, working
capital practices were improved to reduce intra period volatility,
capitalised development costs have reduced and amortisation now
exceeds capitalisation and the pension scheme has moved into
surplus on an IAS19 basis of GBP7.5m (2017: GBP0.6m deficit). The
Group is working to achieve further improvements over the medium
term.
Underlying operating activities generated cash of GBP56.9m
(2017: GBP47.1m), split between continuing GBP44.7m (2017:
GBP41.6m) and discontinued GBP12.2m (2017: GBP5.5m). The Salisbury
incident adversely impacted operating cash flow by cGBP10m.
Continuing cash conversion was 89% of continuing underlying EBITDA
showing focus on working capital improvements is delivering in
other areas of the business.
In November 2017, the Group repaid GBP5.3m and $61.2m of
outstanding loan notes out of existing cash resources and debt
facilities. The remaining loan notes of $83.6m are repayable in
November 2019 and this payment is expected to be funded from our
new revolving credit facility which runs to October 2022.
Working capital
Working capital relating to the continuing businesses was
GBP83.7m (2017: GBP89.0m), a decrease of GBP5.3m. Working capital
as a percentage of continuing revenue has improved 0.9% to 28.1%
(2017: 29.0%).
Inventory decreased as improved inventory management across the
continuing businesses was offset by the impact of the incident at
our UK Countermeasures site where inventory at year-end exceeded
our plan as a result of the site closure and subsequent inability
to complete and fulfill planned orders in the year for which
materials had been procured.
Trade receivables decreased by GBP3m and trade payables
decreased by GBP4m as a result of the timing of activity in the
final quarter of the year.
Debt facilities
The Group's principal debt facilities comprised $83.6m of
private placement loan notes, a GBP90.0m revolving credit facility
and a $10.0m overdraft. The revolving credit facility was
established in October 2018, is with a syndicate of four banks and
has a four-year initial term with options to extend by a further
two years. The Group had GBP68.1m (2017: GBP106.0m) of undrawn
borrowing facilities at the year-end. The Group is subject to two
key financial covenants, which are tested quarterly. These
covenants relate to the leverage ratio between underlying EBITDA
and debt; and the interest cover ratio between underlying EBITDA
and finance costs. The calculation of these ratios involves the
translation of non-Sterling denominated debt using average, rather
than closing, rates of exchange. The revolving credit facility and
the loan notes have differing covenant compliance calculations. The
Group was in compliance with the covenants throughout the year.
Retirement benefit obligations
The surplus on the Group's defined benefit pension schemes was
GBP7.5m (2017: deficit of GBP0.6m), measured in accordance with IAS
19 (Revised) Employee Benefits.
The surplus relates to the Chemring Group Staff Pension Scheme
(the "Scheme"), a UK defined benefit scheme whose assets are held
in a separately administered fund. The Scheme was closed to future
accrual in April 2012. A full actuarial valuation for the Scheme as
at 6 April 2018 has been prepared and updated to 31 October 2018,
using the projected unit credit method. This valuation showed a
surplus of GBP7.5m (2017: GBP0.6m deficit). The improvement
reflects the funding structure agreed with the trustees, under
which contributions of GBP7.9m were paid in 2018, together with the
effect of changes in actuarial assumptions.
The 6 April 2018 triennial valuation shows a technical
provisions deficit of GBP5.8m, which represents a funding level of
94% of liabilities. The Group has agreed with the trustees that
deficit recovery payments totaling GBP6.25m, which were the
contributions due to be made in the period to 30 June 2019 under
the previous deficit recovery plan, will be made prior to 31
December 2018. Of this, GBP0.4m remains to be paid in the 2019
financial year. After this, no further deficit recovery payments
will be required and the Group will be released from the bank
guarantee of GBP7.2m given to the scheme in respect of future
contributions. The next actuarial valuation is due as at 6 April
2021 after which the future funding requirements will be
reassessed.
Contingent liabilities
The Group is, from time to time, party to legal proceedings and
claims, and is involved in correspondence relating to potential
claims, which arise in the ordinary course of business.
In addition the following matters, as previously disclosed in
last year's annual report and subsequent announcements, remained
open at year-end:
-- A dispute between Alloy Surfaces Company, Inc. and the US Army
-- UK's Controlled Foreign Company (CFC) Finance Company exemption
-- The Serious Fraud Office (the "SFO") investigation
-- The incident that occurred at the Group's Countermeasures
site in Salisbury on 10 August 2018.
Full details of these are included in note 12.
Dividends
The Board is recommending a final dividend in respect of the
year to 31 October 2018 of 2.2p (2017: 2.0p) per ordinary share.
With the interim dividend of 1.1p per share (2017: 1.0p), this
results in a total dividend of 3.3p (2017: 3.0p) per share.
If approved, the final dividend will be paid on 18 April 2019 to
shareholders on the register on 5 April 2019. In accordance with
accounting standards, this final dividend has not been recorded as
a liability as at 31 October 2018.
Board of Directors
Michael Ord was appointed to the Board on 1 June 2018, and was
appointed as Group Chief Executive on 1 July 2018, following
Michael Flowers' retirement. Michael Ord joined Chemring from BAE
Systems, where he held a number of senior roles across air, land
and sea domains, including Managing Director of the BAE Systems
Naval Ships business and Managing Director of the BAE Systems F-35
Joint Strike Fighter business. Michael Flowers stepped down from
the Board of Chemring on 30 June 2018, and left the Group on 31
October 2018.
On 8 August 2018, Daniel Dayan gave notice of his intention to
step down from the Board of Chemring, where he served as a
Non-Executive Director and Chairman of the Group's Remuneration
Committee. He formally stepped down from the Board on 30 November
2018.
Andrew Davies, Non-Executive Director of Chemring, assumed the
role of Chairman of the Remuneration Committee on 8 August
2018.
On 1 December 2018 Stephen King was appointed as a Non-Executive
Director.
Current trading and outlook
Trading since the start of the current financial year has been
in line with expectations across all businesses.
The current phased restart plan for the UK Countermeasures site
has operations commencing in the second quarter and revenue
generated in the second half of 2019 financial year. This remains
subject to internal and external health and safety approval and as
such remains a significant uncertainty.
While we continue to work towards a more balanced delivery of
revenue and profit, the operational disruption at our
Countermeasures sites in Salisbury and Australia, the expected
profile of orders, revenue and margins in 2019, combined with
routine seasonality within the business, means that the Group again
expects its trading performance to be significantly weighted
towards the second half of the financial year.
The order book of continuing businesses as at 31 October 2018
was GBP394m, of which GBP242m is currently expected to be
recognised as revenue in 2019.
The Board's expectations for the Group's 2019 performance from
continuing operations remain unchanged, based on the assumption
that insurance proceeds will cover remediation and operating costs
at the UK Countermeasures site in the period before production is
re-established.
The Board is focused on restructuring, simplifying and building
a stronger business. With high technology products and market
leading positions Chemring has the platforms for long-term future
growth.
Going concern
The Group's business activities, key performance indicators, and
principal risks and uncertainties are described within the 2018
Annual Report and Accounts. As part of a regular assessment of the
Group's working capital and financing position, the directors have
prepared a detailed bottom-up two year trading budget and cash flow
forecast for the period through to October 2020, being at least
twelve months after the date of approval of the financial
statements. This is in addition to the Group's longer-term
strategic planning process. In assessing the forecast, the
directors have considered:
-- trading risks presented by economic conditions in the defence
market, particularly in relation to government budgets and
spends;
-- the timing of delivering key contracts;
-- the impact of macro-economic factors, particularly interest rates and foreign exchange rates;
-- the status of the Group's existing financial arrangements and
associated covenant requirements; and
-- the availability of mitigating actions should business
activities fall behind current expectations, including the deferral
of discretionary overheads and restricting cash flows.
Additional detailed sensitivity analysis has been performed on
the forecasts to consider the impact of severe, but plausible,
reasonable worse case scenarios on the covenant requirements. These
scenarios, which sensitised the forecasts for specific identified
risks, modelled the reduction in anticipated levels of underlying
EBITDA and the associated increase in net debt. These scenarios
included significant delays to major contracts and new product
launches. These sensitised scenarios show headroom on all covenant
test dates for the foreseeable future.
The directors have acknowledged the latest guidance on going
concern. They have made appropriate enquiries and taken into
account factors which are detailed in the strategic report within
the 2018 Annual Report and Accounts. As a consequence, the
directors believe that the Company is well placed to manage its
risks.
The directors having considered the forecasts, the risks, and
associated mitigating actions, have a reasonable expectation that
adequate financial resources will continue to be available for the
foreseeable future.
Thus, they continue to support the going concern basis in
preparing the financial statements.
Long-term viability statement
The directors have assessed the Group's viability over a
three-year period to October 2021 based on the above assessment,
combined with the Group's strategic planning process, which gives
greater certainty over the forecasting assumptions used. Based on
this assessment the directors have a reasonable expectation that
the Group will be able to continue in operation and meet all its
liabilities as they fall due up to October 2021.
In considering our viability statements we have considered the
principal risks and uncertainties discussed below and assessed the
impact.
Sensitivity analyses were run to model the financial and
operational impact of plausible downside scenarios of these risk
events occurring individually or in combination. These included the
impacts of a further deterioration in the macroeconomic
environment, underperformance in executing the Group's strategy,
failure to derive targeted benefits from the Group's Operational
Excellence Programme, material movements in foreign exchange rates
and a change in regulations impacting the Group's internal
financing structure. Consideration was also given to the
plausibility of the occurrence of other individual events that in
their own right could have a material impact on the Group's
viability.
Based on the consolidated financial impact of the sensitivity
analyses and associated mitigating internal controls and risk
management actions that are either now in place or could be
implemented, the Board has been able to conclude that the Group
will be able to maintain sufficient bank facilities to meet its
funding needs over the three year period.
Principal risks and uncertainties
The principal risks and uncertainties which could have a
material impact on the Group's performance and could cause actual
results to differ materially from expected and historical results
have not changed significantly from those set out in the Group's
2017 Annual Report and Accounts and the 2018 interim report. A
detailed description of the Group's principal risks and
uncertainties and the ways they are mitigated can be found on pages
34 to 41 of the Group's 2018 Annual Report and Accounts. In
summary, the principal risks relate to:
-- Health, safety, security and environmental risks
-- Strategic risks
-- Financial risks
-- Operational risks
-- People risks
-- Legal and compliance risks
-- Reputational risks
Management have detailed mitigation plans and assurance
processes to manage and monitor these risks.
RESPONSIBILITY STATEMENT OF THE DIRECTORS ON THE ANNUAL REPORT
AND ACCOUNTS
The responsibility statement below has been prepared in
connection with the Company's full annual report and accounts for
the year ended 31 October 2018. Certain parts thereof are not
included within this announcement.
We confirm to the best of our knowledge:
1. the financial statements, prepared in accordance with International
Financial Reporting Standards as adopted by the European
Union, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and
the undertakings included in the consolidation taken as a
whole;
2. the strategic report includes a fair review of the development
and performance of the business and the position of the Company
and the undertakings included in the consolidation taken
as a whole, together with a description of the principal
risks and uncertainties they face; and
3. the annual report and financial statements, taken as a whole,
are fair, balanced and understandable, and provide the information
necessary for shareholders to assess the Company's performance,
business model and strategy.
This responsibility statement was approved by the Board of
directors on 17 January 2019, and has been signed on its behalf by
Sarah Ellard and Andrew Lewis.
CONSOLIDATED INCOME STATEMENT
for the year ended 31 October 2018
2018 2017
Underlying Non-underlying Underlying Non-underlying
performance* items* Total performance* items* Total
GBPm GBPm GBPm GBPm GBPm GBPm
Continuing operations
Revenue 297.4 - 297.4 307.1 - 307.1
------------- --------------- -------- ------------- --------------- -------
Operating profit/(loss) 31.0 (46.9) (15.9) 31.5 (26.9) 4.6
Finance expense (6.1) - (6.1) (11.3) - (11.3)
------------- --------------- -------- ------------- --------------- -------
Profit/(loss) before
tax 24.9 (46.9) (22.0) 20.2 (26.9) (6.7)
Taxation (5.7) (13.1) (18.8) (3.7) 6.1 2.4
------------- --------------- -------- ------------- --------------- -------
Profit/(loss) after
tax 19.2 (60.0) (40.8) 16.5 (20.8) (4.3)
Discontinued operations
Profit/(loss) after
tax from discontinued
operations (note 4) 6.2 (71.2) (65.0) 19.5 (8.6) 10.9
------------- --------------- -------- ------------- --------------- -------
Profit/(loss) after
tax 25.4 (131.2) (105.8) 36.0 (29.4) 6.6
------------- --------------- -------- ------------- --------------- -------
Earnings/(loss) per ordinary
share
Continuing operations
Basic 6.9p (14.6)p 5.9p (1.5)p
Diluted 6.7p (14.6)p 5.8p (1.5)p
------------- --------------- -------- ------------- --------------- -------
Continuing operations and discontinued
operations
Basic 9.1p (37.8)p 12.9p 2.4p
Diluted 8.9p (37.8)p 12.6p 2.3p
------------- --------------- -------- ------------- --------------- -------
* Further information about continuing non-underlying items is
set out in note 3.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 October 2018
2018 2017
GBPm GBPm
(Loss)/profit after tax attributable to equity
holders of the parent as reported (105.8) 6.6
Items that will not be reclassified subsequently
to profit or loss
Actuarial gains on defined benefit pension
schemes 0.9 11.9
Movement on deferred tax relating to pension
schemes (0.1) (2.0)
-------- -------
0.8 9.9
-------- -------
Items that may be reclassified subsequently
to profit or loss
Exchange differences on translation of foreign
operations 5.2 (11.6)
Current tax on items taken directly to equity - (3.1)
Deferred tax on exchange differences on translation
of foreign operations (0.5) 0.8
-------- -------
4.7 (13.9)
-------- -------
Total comprehensive (loss)/income attributable
to equity holders of the parent (100.3) 2.6
-------- -------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 October 2018
Share Special
Share premium capital Revaluation Translation Retained Own
capital account reserve reserve reserve earnings shares Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 November 2017 2.8 305.3 12.9 1.1 (24.8) 113.5 (9.6) 401.2
Loss after tax - - - - - (105.8) - (105.8)
Other comprehensive
(loss)/income - - - - (2.4) 8.5 - 6.1
Tax relating to
components of other
comprehensive income - - - - - (0.6) - (0.6)
----------------------- -------- --------- --------- ------------ ------------ --------- ------- --------
Total comprehensive
loss - - - - (2.4) (97.9) - (100.3)
Ordinary shares
issued - 0.1 - - - - - 0.1
Share-based payments
(net of settlement) - - - - - 0.1 - 0.1
Dividends paid - - - - - (8.7) - (8.7)
Transactions in
own shares - - - - - - 1.8 1.8
Transfers between
reserves - - - (0.1) - 0.1 - -
-------- --------- --------- ------------ ------------ --------- ------- --------
At 31 October 2018 2.8 305.4 12.9 1.0 (27.2) 7.1 (7.8) 294.2
-------- --------- --------- ------------ ------------ --------- ------- --------
Share Special
Share premium capital Revaluation Translation Retained Own
capital account reserve reserve reserve earnings shares Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 November 2016 2.8 305.1 12.9 1.1 (20.7) 121.8 (9.6) 413.4
Impact of IFRS15 - - - - - (10.2) - (10.2)
----------------------- -------- -------- -------- ------------ ------------ --------- ------- -------
Profit after tax - - - - - 6.6 - 6.6
Other comprehensive
(loss)/income - - - - (4.1) 4.4 - 0.3
-----------------------
Tax relating to
components of other
comprehensive income - - - - - (4.3) - (4.3)
----------------------- -------- -------- -------- ------------ ------------ --------- ------- -------
Total comprehensive
income - - - - (4.1) 6.7 - 2.6
Ordinary shares
issued - 0.2 - - - - - 0.2
Share-based payments
(net of settlement) - - - - - 1.6 - 1.6
Dividends paid - - - - - (6.4) - (6.4)
-------- -------- -------- ------------ ------------ --------- ------- -------
At 31 October 2017 2.8 305.3 12.9 1.1 (24.8) 113.5 (9.6) 401.2
-------- -------- -------- ------------ ------------ --------- ------- -------
CONSOLIDATED BALANCE SHEET
as at 31 October 2018
2018 2017
GBPm GBPm GBPm GBPm
Non-current assets
Goodwill 109.2 125.4
Development costs 24.0 33.7
Other intangible assets 37.6 57.0
Property, plant and equipment 148.1 160.1
Retirement benefit surplus 7.5 -
Deferred tax 36.8 63.2
------- --------- -------- --------
363.2 439.4
------- --------- -------- --------
Current assets
Inventories 71.4 97.6
Trade and other receivables 62.2 131.0
Cash and cash equivalents 9.6 33.6
Derivative financial instruments 0.1 0.4
------- --------- -------- --------
143.3 262.6
------- --------- -------- --------
Assets classified as held for 43.7 -
sale
------- --------- -------- --------
Total assets 550.2 702.0
------- --------- -------- --------
Current liabilities
Borrowings - (51.6)
Trade and other payables (68.6) (111.9)
Provisions (6.7) (6.5)
Current tax (0.8) (5.5)
Derivative financial instruments (0.3) (0.4)
------- --------- -------- --------
(76.4) (175.9)
------- --------- -------- --------
Liabilities directly associated
with assets classified as held (26.9) -
for sale
Non-current liabilities
Borrowings (91.3) (61.9)
Provisions (14.0) (8.8)
Deferred tax (47.1) (53.5)
Preference shares (0.1) (0.1)
Retirement benefit obligations - (0.6)
Derivative financial instruments (0.2) -
------- --------- -------- --------
(152.7) (124.9)
------- --------- -------- --------
Total liabilities (256.0) (300.8)
------- --------- -------- --------
Net assets 294.2 401.2
------- --------- -------- --------
Equity
Share capital 2.8 2.8
Share premium account 305.4 305.3
Special capital reserve 12.9 12.9
Revaluation reserve 1.0 1.1
Translation reserve (27.2) (24.8)
Retained earnings 7.1 113.5
------- --------- -------- --------
302.0 410.8
Own shares (7.8) (9.6)
------- --------- -------- --------
Total equity 294.2 401.2
------- --------- -------- --------
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 October 2018
2018 2017
GBPm GBPm
Cash flows from operating activities
-------------------------------------------------------- ------- -------
Cash generated from continuing underlying operations 44.7 41.6
Cash generated from discontinued underlying operations 12.2 5.5
Cash impact of non-underlying items (7.6) (6.3)
-------------------------------------------------------- ------- -------
Cash flows from operating activities 49.3 40.8
Retirement benefit deficit recovery contributions (7.9) (5.0)
Tax paid (5.5) (3.6)
------- -------
Net cash inflow from operating activities 35.9 32.2
------- -------
Cash flows from investing activities
Purchases of intangible assets (3.2) (3.9)
Purchases of property, plant and equipment (18.8) (12.6)
Acquisition - deferred consideration (0.7) -
Customer funding for capital programmes 2.6 -
Proceeds on disposal of property, plant and equipment 0.4 -
------- -------
Net cash outflow from investing activities (19.7) (16.5)
------- -------
Cash flows from financing activities
Dividends paid (8.7) (6.4)
Finance expense paid (6.0) (9.3)
Capitalised facility fees paid (0.6) (0.5)
Drawdown of borrowings 26.5 -
Repayments of borrowings (51.9) (28.8)
Repayments of obligations under finance leases - (0.1)
------- -------
Net cash outflow from financing activities (40.7) (45.1)
------- -------
Decrease in cash and cash equivalents (24.5) (29.4)
Cash and cash equivalents at beginning of the
year 33.6 63.1
Effect of foreign exchange rate changes 0.5 (0.1)
------- -------
Cash and cash equivalents at end of the year 9.6 33.6
------- -------
Notes
1. ACCOUNTS AND AUDITOR'S REPORT
The financial information set out above does not constitute the
Company's statutory accounts for the year ended 31 October 2018 or
31 October 2017 but is derived from those accounts. Statutory
accounts for 2017 have been delivered to the Registrar of
Companies, and those for 2018 will be delivered following the
Company's Annual General Meeting. The auditors have reported on
these accounts; their reports were unqualified, did not draw
attention to any matters by way of emphasis without qualifying
their report, and did not contain any statements required under
either section 498(2) or section 498(3) of the Companies Act
2006.
This announcement has been prepared on the basis of the
accounting policies set out in the Company's financial statements
for the year ended 31 October 2018.
Whilst the financial information included in this announcement
has been computed in accordance with International Financial
Reporting Standards ("IFRSs"), this announcement does not itself
contain sufficient information to comply with IFRSs. The Company
expects to post full financial statements that comply with IFRSs on
its website on 18 February 2018 (see note 15 below).
Recent accounting developments
The following standards, amendments and interpretations have
been issued by the International Accounting Standards Board (IASB)
or by the IFRS IC. The Group's approach to these is as follows:
i) The following International Financial Reporting Committee
("IFRIC") interpretations, amendments to existing standards and new
standards were adopted in the year ended 31 October 2018 but have
not materially impacted the reported results or the financial
position:
-- Amendments to IAS 7 Statement of Cash Flows; and
-- Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses.
ii) In the year ended 31 October 2017, the following standard
was adopted and has affected the amounts reported in 2017
results:
-- IFRS 15 Revenue from Contracts with Customers (effective for
periods beginning on or after 1 January 2018 with early adoption
permitted).
iii) At the date of authorisation of this announcement, the
following standards and interpretations that are potentially
relevant to the Group and which have not yet been applied in these
reported results were in issue but not yet effective (and in some
cases had not yet been adopted by the European Union):
Effective for periods beginning on or after 1 January 2018
-- Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions;
-- IFRS 9 Financial Instruments: Recognition and Measurement;
-- Annual Improvements to IFRSs 2014-2016 Cycle; and
-- IFRIC 22 Foreign Currency Transactions and Advance Consideration
Effective for periods beginning on or after 1 January 2019
-- IFRS 16 Leases;
-- Amendments to IAS 19 Employee Benefits;
-- Annual Improvements to IFRSs 2015-2017 Cycle; and
-- IFRIC 23 Uncertainty over Income Tax Treatments
Effective for periods beginning on or after 1 January 2021
-- IFRS 17 Insurance Contracts
The directors do not expect the adoption of these standards and
interpretations will have a material impact on the results of the
Group in future periods except as follows:
-- IFRS 16 Leases will impact the measurement, recognition,
presentation and disclosure of leases, particularly operating
leases where the term is longer than 12 months.
The impact of IFRS 16 Leases is currently being assessed. Under
IFRS 16 Leases, lessees will be required to apply a single model to
recognise a lease liability and asset for all leases, including
those classified as operating leases under current accounting
standards, unless the underlying asset has a low value or the lease
term is 12 months or less. The adoption of IFRS 16 will have a
significant impact on the results as each lease will give rise to a
right of use asset which will be depreciated on a straight line
basis, and a lease liability with a related interest charge. The
depreciation and interest will replace the operating lease payments
currently recognised as an expense. The impact will depend on the
transition approach and the contracts in effect at the time of the
adoption. At 31 October 2018, operating lease commitments were
GBP5.3m and operating lease payments for 2018 were GBP1.4m.
IFRS 9 sets out requirements for recognising and measuring
financial assets, financial liabilities and some contracts to buy
or sell non-financial items. This standard replaces IAS 39
Financial Instruments: Recognition and Measurement. The adoption of
IFRS 9 Financial Instruments from 1 November 2018 is expected to
result in changes in accounting policies and adjustments to the
amounts recognised in the financial statements, however the overall
impact on the financial statements is not expected to be material.
In accordance with the transitional provisions in IFRS 9,
comparative figures will not be restated.
Trade receivables, contract assets and cash and cash equivalents
will now be classified as amortised cost, rather than loans and
receivables, however as these assets were accounted for at
amortised cost under IAS 39, there is not expected to be a change
in the carrying amount.
Trade payables and bank loans and overdrafts continue to be
classified as other financial liabilities and accounted for at
amortised cost.
Regarding impairment, the Group will apply the IFRS 9 simplified
approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all assets held at amortised cost. The
impact of the change in impairment methodology is not expected to
be material.
Beyond this information, it is not practicable to provide a
reasonable estimate of the effect of these standards.
2. SEGMENTAL ANALYSIS - CONTINUING OPERATIONS
Year ended 31 October 2018
Countermeasures Sensors Energetics Unallocated Group
GBPm GBPm GBPm GBPm GBPm
Revenue 126.0 87.3 84.1 - 297.4
------------------------------ ---------------- -------- ----------- ------------ --------
Segment result before
depreciation, amortisation,
non-underlying items
and discontinued
operations 23.6 18.5 16.0 (8.1) 50.0
Depreciation (9.7) (1.7) (3.8) (0.1) (15.3)
Amortisation (1.8) (1.5) (0.4) - (3.7)
------------------------------ ---------------- -------- ----------- ------------ --------
Segmental underlying
operating profit 12.1 15.3 11.8 (8.2) 31.0
Amortisation of acquired
intangibles (0.4) (6.4) (4.8) - (11.6)
Non-underlying items (15.9) (3.7) - (15.7) (35.3)
------------------------------ ---------------- -------- ----------- ------------ --------
Segmental operating
(loss)/profit (4.2) 5.2 7.0 (23.9) (15.9)
------------------------------ ---------------- -------- ----------- ------------ --------
Year ended 31 October 2017
Countermeasures Sensors Energetics Unallocated Group
GBPm GBPm GBPm GBPm GBPm
Revenue 125.3 91.2 90.6 - 307.1
------------------------------ ---------------- -------- ----------- ------------ --------
Segment result before
depreciation, amortisation,
non-underlying items
and discontinued
operations 27.5 19.3 18.3 (10.2) 54.9
Depreciation (10.8) (1.8) (3.7) (0.1) (16.4)
Amortisation (2.3) (4.1) (0.5) (0.1) (7.0)
------------------------------ ---------------- -------- ----------- ------------ --------
Segmental underlying
operating profit 14.4 13.4 14.1 (10.4) 31.5
Amortisation of acquired
intangibles (0.4) (6.7) (5.0) - (12.1)
Non-underlying items (3.6) (5.7) (5.6) 0.1 (14.8)
------------------------------ ---------------- -------- ----------- ------------ --------
Segmental operating
profit 10.4 1.0 3.5 (10.3) 4.6
------------------------------ ---------------- -------- ----------- ------------ --------
3. ALTERNATIVE PERFORMANCE MEASURES
The principal Alternative Performance Measures ("APMs")
presented are the underlying measures of earnings which exclude
discontinued operations, exceptional items, gain or loss on the
movement on the fair value of derivative financial instruments, and
the amortisation of acquired intangibles. The directors believe
that these APMs improve the comparability of information between
reporting periods. The term underlying is not defined under IFRS
and may not be comparable with similarly titled measures used by
other companies.
2018 2017
GBPm GBPm
Acquisition and disposal related costs (4.1) (2.1)
Business restructuring costs (8.1) (14.0)
Less non-underlying depreciation in business 0.7 1.0
restructuring costs
Legal costs (12.8) (0.4)
Change of Chief Executive (1.7) -
-------- -------
Pension scheme charge in respect of GMP equalisation (0.8) -
court ruling
-------- -------
(Loss)/gain on the movement in the fair value
of derivative financial instruments (0.4) 1.7
-------- -------
Impact of non-underlying items on EBITDA (27.2) (13.8)
Non-underlying depreciation in business restructuring
costs (0.7) (1.0)
Impairment of capitalised development costs (7.4) -
Intangible amortisation arising from business
combinations (11.6) (12.1)
-------- -------
Impact of non-underlying items on profit before
tax (46.9) (26.9)
Tax impact of non-underlying items (13.1) 6.1
-------- -------
Impact of non-underlying items on continuing
profit after tax (60.0) (20.8)
Discontinued operations after tax (71.2) (8.6)
-------- -------
Impact of non-underlying items on profit after
tax (131.2) (29.4)
-------- -------
Underlying profit after tax 25.4 36.0
-------- -------
Statutory (loss)/profit after tax (105.8) 6.6
------------------------------------------------------- -------- -------
-- Acquisition and disposal-related costs of GBP4.1m (2017:
GBP2.1m) relate to transaction costs and an earnout payment on the
acquisition of Wallop Defence Systems' assets for which no
provision was made at the time of acquisition. Additional payments
of up to GBP4m, although not probable and considered remote, are
conditional upon the receipt of specific orders, and may be made
over the next year.
-- In 2018, business restructuring costs of GBP8.1m (2017:
GBP14.0m) relate to the non-capital costs / asset write offs and
the demolition element of the Tennessee site transformation.
-- In 2018, legal costs of GBP12.8m (2017: GBP0.4m) were in
relation to ongoing investigations. This includes a provision for
estimated future committed costs of GBP5.0m.
-- The costs associated with the change of Chief Executive of
GBP1.7m (2017: GBPnil). Michael Flowers stepped down as Group Chief
Executive on 30 June 2018 and Michael Ord was appointed as Group
Chief Executive on 1 July 2018.
-- On 26 October 2018, the High Court handed down a judgement
involving the Lloyds Banking Group's defined benefit pension
schemes. The judgement concluded that pension schemes should be
amended to equalise pension benefits for men and women in relation
to guaranteed minimum pension benefits. We are working with our
actuarial advisers to understand the extent to which judgement
crystallises any additional liabilities for the Group UK defined
benefit pension scheme. We are early in the evaluation process, but
we estimate that the additional liability could be in the region of
GBP0.4m and GBP1.2m, therefore we have recognised GBP0.8m in our
2018 results. Subsequent to further assessment with our advisers,
any necessary further adjustment is expected to be recognised in
the first half of our 2019 financial year.
-- Included in non-underlying items is a GBP0.4m loss (2017:
GBP1.7m gain) on the movement in fair value of derivative financial
instruments. This is excluded from underlying earnings to ensure
the recognition of the derivative matches the timing of the
underlying transaction.
-- In 2018, an impairment of capitalised product development of
GBP7.4m (2017: GBPnil) was recognised following the appointment of
a new Chief Executive who conducted a strategic review of the
Group's product portfolio to rationalise future resources on areas
where the Group had a niche position and competitive advantage.
-- The amortisation charge arising from business combinations of GBP11.6m (2017: GBP12.1m).
-- The tax impact of non-underlying items comprises a GBP17.4m
charge in respect of the enactment of the US Tax Cuts and Jobs Act
on 22 December 2017, and a GBP4.3m tax credit on the above
non-underlying items.
4. DISCONTINUED OPERATIONS
A strategic review of the Group's Energetics portfolio was
conducted during the year. The Board concluded that the future
focus within the Energetics segment should be on the Energetics
Devices businesses. It therefore made the decision to exit the
commodity Energetics businesses.
2018 2017
GBPm GBPm
Revenue 138.6 240.4
Underlying operating profit from discontinued
operations 8.0 23.9
Tax on underlying operating profit from discontinued
operations (1.8) (4.4)
------- ------
6.2 19.5
Profit after tax is analysed as:
Before exceptional items 6.2 19.5
------------------------------------------------------ ------- ------
Exceptional items (72.0) (9.7)
Tax on exceptional items 0.8 1.1
------------------------------------------------------ ------- ------
(71.2) (8.6)
(Loss)/profit for the year from discontinued
operations (65.0) 10.9
------- ------
In 2018 the exceptional items include the amortisation of
acquired intangibles of GBP2.7m and an impairment loss of GBP69.3m
in respect of the carrying values of Chemring Defence UK Limited,
Chemring Ordnance Inc., B.D.L. Systems Limited and Richmond
Electronics and Engineering Limited. Amortisation of acquired
intangibles arising from business combinations is associated with
acquisition costs under IFRS 3 Business Combinations. As such,
these costs are not reflective of the underlying activities of the
discontinued operations and therefore have been treated as
exceptional items. Impairment losses have been removed from
underlying measures for improved comparability between reporting
periods. This is in line with the Group's accounting policy.
In 2017 the exceptional items included a total impairment loss
of GBP9.8m in respect of the Chemring Defence UK business and the
amortisation of acquired intangibles of GBP2.9m, offset by the
release of provisions in respect of previously disposed
businesses.
5. HELD FOR SALE
The assets held for sale relate to four commodity Energetics
businesses: Chemring Defence UK Limited, Chemring Prime Contracts
Limited, Chemring Military Products Inc. and Chemring Ordnance
Inc.
6. EARNINGS PER SHARE
Earnings per share is based on the average number of shares in
issue, excluding own shares held, of 279,768,360 (2017:
279,244,616).
Diluted earnings per share has been calculated using a diluted
average number of shares in issue, excluding own shares held, of
285,993,316 (2017: 285,023,906).
The earnings used in the calculations of the various measures of
earnings per share are as follows:
2018 2017
Basic Diluted Basic Diluted
GBPm EPS (pence) EPS (pence) GBPm EPS (pence) EPS (pence)
Underlying profit after
tax 19.2 6.9 6.7 16.5 5.9 5.8
Non-underlying items (60.0) (20.8)
-------- ------------- ------------- ------- -------------- -------------
Loss from continuing
operations (40.8) (14.6) (14.6) (4.3) (1.5) (1.5)
(Loss)/profit from discontinued
operations (65.0) (23.2) (23.2) 10.9 3.9 3.8
-------- ------------- ------------- ------- -------------- -------------
Total (loss)/profit after
tax (105.8) (37.8) (37.8) 6.6 2.4 2.3
-------- ------------- ------------- ------- -------------- -------------
The number of shares in issue differs from the number held by
third parties as the Company holds some of its shares in
treasury.
7. CASH GENERATED FROM OPERATING ACTIVITIES
2018 2017
GBPm GBPm
Operating (loss)/profit from continuing operations (15.9) 4.6
Amortisation of development costs 3.6 6.9
Amortisation of intangible assets arising from
business combinations 11.6 12.1
Amortisation of patents and licenses 0.1 0.1
Loss on disposal of non-current assets 0.2 0.2
Depreciation of property, plant and equipment 15.3 16.4
Non-cash movement of non-underlying items 35.3 15.0
Gain on the fair value of derivative financial
instruments - (0.1)
Share-based payment expense 1.1 1.7
------- -------
Operating cash flows before movements in working
capital 51.3 56.9
Decrease in inventories 1.6 3.5
Decrease/(increase) in trade and other receivables 0.2 (11.8)
(Decrease) in trade and other payables (8.3) (6.9)
(Decrease) in provisions (0.1) (0.1)
Operating cash flow from continuing operations 44.7 41.6
Discontinued operations:
Operating cash flow from discontinued operations 12.2 5.5
Cash impact of non-underlying items from discontinued
operations (0.1) (0.7)
------- -------
Net cash inflow from discontinued operating activities 12.1 4.8
Net cash outflow from discontinued investing
activities (1.2) (2.8)
------- -------
Net cash inflow from discontinued operations 10.9 2.0
------- -------
8. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2018 2017
GBPm GBPm
Decrease in cash and cash equivalents during
the year (24.5) (29.4)
------- -------
Decrease in debt and lease financing due to cash
flows 26.0 29.4
------- -------
Decrease in net debt resulting from cash flows 1.5 -
Effect of foreign exchange rate changes (2.0) 10.0
Amortisation of debt finance costs (1.3) (2.4)
------- -------
Movement in net debt (1.8) 7.6
Net debt at beginning of the year (80.0) (87.6)
------- -------
Net debt at end of the year (81.8) (80.0)
------- -------
9. ANALYSIS OF NET DEBT
As at As at
1 Nov Cash Non-cash Exchange 31 Oct
2017 flows changes rate effects 2018
GBPm GBPm GBPm GBPm GBPm
Cash at bank and in hand 33.6 (24.5) - 0.5 9.6
Debt due within one year (51.6) 26.0 25.6 - -
Debt due after one year (61.9) - (26.9) (2.5) (91.3)
Preference shares (0.1) - - - (0.1)
----------- ------- --------- -------------- --------
(80.0) 1.5 (1.3) (2.0) (81.8)
----------- ------- --------- -------------- --------
10. DIVID
At the Annual General Meeting on 20 March 2018 the shareholders
approved a final dividend in respect of the year ended 31 October
2017 of 2.0p per ordinary share. This was paid on 20 April 2018 to
shareholders on the register on 6 April 2018.
An interim dividend in respect of 2018 of 1.1p per ordinary
share was paid on 14 September 2018 to shareholders on the register
on 31 August 2018.
The Board is recommending a final dividend in respect of the
year to 31 October 2018 of 2.2p (2017: 2.0p) per ordinary share.
With the interim dividend of 1.1p (2017: 1.0p), this results in a
total dividend of 3.3p (2017: 3.0p) per ordinary share. If
approved, the final dividend will be paid on 18 April 2019 to
shareholders on the register on 5 April 2019. In accordance with
accounting standards, this final dividend has not been recorded as
a liability as at 31 October 2018.
11. EXCHANGE RATES
The following exchange rates applied during the year:
Average Closing Average Closing
rate rate rate 2017 rate
2018 2018 2017
US Dollar 1.34 1.28 1.30 1.33
AU Dollar 1.74 1.80 1.68 1.73
-------- -------- ----------- --------
For the year ended 31 October 2018 a 10 cent decrease in the US
dollar exchange rate would have increased reported net debt by
approximately GBP5.6m (2017: GBP8.9m).
12. CONTINGENT LIABILITIES
The Group is, from time to time, party to legal proceedings and
claims, and is involved in correspondence relating to potential
claims, which arise in the ordinary course of business. In
addition, the following matters remain open at year end:
A dispute between Alloy Surfaces Company, Inc. and the US Army,
in relation to disputed pricing of a certain historic contract
fulfilled by Alloy Surfaces Company, Inc., proceeded to a hearing
in front of the US Armed Services Board of Contract Appeals
("ASBCA") in April 2017. ASBCA is expected to take approximately
two years to issue its decision in relation to this matter, and
therefore it is too early to predict the outcome of the hearing.
The range of possible outcomes is between GBPnil to GBP12.0m. A
provision of GBP1.0m (2017: GBP1.1m) exists to cover estimated
legal costs for the Group with regards to this issue.
Since 2013, the Group has benefited from the UK's Controlled
Foreign Company ("CFC") Finance Company exemption. The European
Commission has launched an investigation into whether the UK's CFC
Finance Company exemption breaches state aid rules. No timescale
has been set for the review and this could take several years to
conclude. If, at the end of the investigation, the regime is
considered to be in contravention of the State Aid provisions, the
UK Government will be required to seek repayment of the lost tax
from the relevant taxpayers. Given the early stage of the
investigation, it is too early to determine whether a tax liability
is probable. The range of possible outcomes is between GBPnil and
GBP15m, plus interest.
The Serious Fraud Office ("SFO") is currently undertaking a
formal investigation into concerns about bribery, corruption and
money laundering involving intermediaries who previously
represented one of the Group's UK-based subsidiaries, Chemring
Technology Solutions Limited ("CTSL"), and its predecessor
companies. The investigation commenced following a voluntary report
made by CTSL relating to two specific historic contracts, the first
of which was awarded prior to the Group's ownership of the business
concerned and the second in 2011, neither of which are considered
to be material in the context of the Group. It is too early to
predict the outcome of the SFO's investigation, in which the Group
continues to co-operate fully.
On 10 August 2018 an incident occurred at the Group's
Countermeasures facility in Salisbury. The Group responded
immediately to support those who were injured, and maintains
appropriate employee liability insurance that we expect will
provide full compensation in due course. We continue to fully
support the Health and Safety Executive ("HSE") as it undertakes
its investigation. Whilst provisions have been recorded for costs
that have been identified, it is possible that additional uninsured
costs and, depending on the outcome of the HSE investigation,
financial penalties may be incurred. At this stage, these costs are
not anticipated to be material in the context of the Group's
financial statements.
13. EVENTS AFTER THE BALANCE SHEET DATE
There are no post balance sheet events.
14. RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed. The directors of the Company had no material
transactions with the Company during the year, other than in
connection with their service agreements.
15. 2018 ANNUAL REPORT AND ACCOUNTS
The annual report and accounts for the year ended 31 October
2018 will be posted to shareholders on 18 February 2019, and a copy
will be posted on the Company's website, www.chemring.co.uk, later
that day. They will also be available from that date at the
registered office, Roke Manor, Old Salisbury Lane, Romsey,
Hampshire, SO51 0ZN.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR BFMPTMBABBAL
(END) Dow Jones Newswires
January 17, 2019 02:00 ET (07:00 GMT)
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