TIDMCHG
RNS Number : 1805U
Chemring Group PLC
21 November 2019
FOR IMMEDIATE RELEASE 21 November 2019
CHEMRING GROUP PLC ("Chemring" or the "Group")
Disposal of Chemring Ordnance, Inc.
Chemring today announces that a conditional agreement has been
entered into for the sale of its US subsidiary Chemring Ordnance,
Inc. ("COR") to Nammo Defense Systems Inc. ("Nammo") for a cash
consideration of $17 million. This sale completes the Group's exit
from its commoditised energetics businesses.
The sale, which is subject to regulatory approval by the US
authorities, is expected to complete no later than the end of Q2
FY20.
COR, located in Perry, Florida, manufactures a range of ordnance
and pyrotechnic products primarily for military customers. In the
year ended 31 October 2018, COR generated revenue of $57 million,
an underlying operating loss of $0.2 million, had gross assets of
$20.5 million and net assets of $11.3 million. The business was
treated as discontinued in the Group's 2018 financial statements
and for the year ended 31 October 2019 made a small operating
loss.
The consideration will be paid in cash on completion, subject to
a working capital adjustment.
The proceeds after costs will be used by the Group for general
corporate purposes.
Nammo is an international aerospace and defence company
headquartered in Norway. With 2,400 employees across more than 30
sites and offices in 13 countries, the company is one of the
world's leading providers of ammunition and rocket motors for both
military and civilian customers.
Following a strategic review, the Group announced in November
2018 its intention to exit the commoditised energetics businesses
located in Derby and Florida, and to focus on its niche specialist
energetic devices and materials businesses in Chicago, Scotland and
Norway, where the Group has strong intellectual property and high
barriers to entry.
Michael Ord, Chief Executive of Chemring, said:
"I am pleased to announce the sale of Chemring Ordnance to
Nammo. This transaction is another step in the delivery of our
strategy and provides a greater focus on our growing and
differentiated positions in Sensors & Information and
Countermeasures & Energetics. Today's announcement concludes
the process of exiting the Group's commoditised energetics
businesses and further improves the quality of the Group and its
future earnings."
- ENDS -
For further information:
Rupert Pittman Group Director of Corporate Affairs, Chemring Group PLC +44 (0)1794 833901
Andrew Jaques
Oliver Hughes MHP Communications +44 (0)20 3128 8100
Notes to editors
1. In November 2018 the Group announced that the future focus of
its Energetics segment would be on its niche energetic devices and
materials businesses in Chicago, Scotland and Norway. The Group
also announced it would exit the commoditised energetics businesses
in Derby and Florida; these businesses were treated as discontinued
in the 2018 financial statements. In April 2019 the Group announced
the sale of Chemring Military Products in Florida, and in June 2019
the Group announced the sale of Chemring Defence in Derby.
2. About Chemring
-- 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: Countermeasures & Energetics, and Sensors &
Information
-- 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
Cautionary statement
This announcement contains unaudited information based on
management accounts and forward-looking statements that are based
on current expectations or beliefs, as well as assumptions about
future events. These forward-looking statements can be identified
by the fact that they do not relate only to historical or current
facts. Forward-looking statements often use words such as
anticipate, target, expect, estimate, intend, plan, goal, believe,
will, may, should, would, could, is confident, or other words of
similar meaning. Undue reliance should not be placed on any such
statements because they speak only as at the date of this document
and, by their very nature, they are subject to known and unknown
risks and uncertainties and can be affected by other factors that
could cause actual results, and Chemring's plans and objectives, to
differ materially from those expressed or implied in the
forward-looking statements.
There are a number of factors which could cause actual results
to differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are; increased competition, the loss of
or damage to one or more key customer relationships, changes to
customer ordering patterns, delays in obtaining customer approvals
for engineering or price level changes, the failure of one or more
key suppliers, the outcome of business or industry restructuring,
the outcome of any litigation, changes in economic conditions,
currency fluctuations, changes in interest and tax rates, changes
in raw material or energy market prices, changes in laws,
regulations or regulatory policies, developments in legal or public
policy doctrines, technological developments, the failure to retain
key management, or the key timing and success of future acquisition
opportunities or major investment projects.
Chemring undertakes no obligation to revise or update any
forward-looking statement contained within this announcement,
regardless of whether those statements are affected as a result of
new information, future events or otherwise, save as required by
law and regulations.
This information is provided by RNS, the 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
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