TIDMCHG
RNS Number : 9802Q
Chemring Group PLC
02 November 2021
FOR IMMEDIATE RELEASE
2 NOVEMBER 2021
CHEMRING GROUP PLC ("Chemring", the "Group" or the
"Company")
CONTRACT AWARDS AND FINANCIAL YEAR-END UPDATE
Contract awards
Chemring is pleased to announce that in the final month of its
financial year, its US based subsidiary, Chemring Sensors &
Electronic Systems ("CSES") has been awarded a Full Rate Production
contract for the Enhanced Maritime Biological Detection ("EMBD")
Program of Record. The EMBD system is an advanced sensor system to
rapidly detect, collect and identify airborne biological warfare
agents.
This sole source framework contract is valued at up to US$99m
with an estimated completion date of December 2027. An initial
delivery order of US$16m will see deliveries being made in the
final quarter of FY22 and FY23. The customer is the US Department
of Defense and all work under this contract will be performed at
CSES's facility at Charlotte, North Carolina.
Chemring Australia has also received a contract modification
valued at US$20m. This is in addition to the US$22m contract that
was announced on 28 September 2021 and is for the supply of
MJU-68/B infrared countermeasures in support of the F-35 programme.
The customers are both the US Navy and Air Force, and the
Governments of Norway, Japan, Italy and the Netherlands. Work under
this contract will see deliveries being made in FY22. These
countermeasures play a critical role in protecting service men and
women from the threats posed by heat-seeking and radar-controlled
missiles.
Financial year-end update
Trading in the period to 31 October 2021 has progressed as
planned despite the challenging environment in which we continue to
operate. As a result, the outturn for the year ending 31 October
2021 is expected to be in line with the Board's expectations, with
adjusted operating profit expected to be in line with the consensus
of current analyst expectations.*
The continued focus on the management of working capital, cash
generation and the reduction of intra-period net debt volatility
has again delivered positive results. Year-end net debt is now
expected to be approximately GBP27m (2020: GBP48.2m), with strong
operating cash conversion of 105% of EBITDA (2020: 110%), together
with lower finance and tax payments driving the reduction.
The closing order book at 31 October 2021 was GBP502m (2020:
GBP476m) which provides 83% (2020: 78%) cover of expected FY22
revenue, split 94% (2020: 92%) in Countermeasures & Energetics
and 65% (2020: 53%) in Sensors & Information.
FY21 results
Chemring's FY21 results are scheduled to be announced on 14
December 2021.
-ENDS-
* The Group believes analyst forecasts for adjusted operating
profit for the year ended 31 October 2021 are in the range of
GBP56.0m to GBP59.6m, with a consensus of GBP57.5m.
For further information:
Rupert Pittman Group Director of Corporate Affairs, 01794 463401
Chemring Group PLC
Andrew Jaques MHP Communications 0203 128 8170
James Bavister
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 FTSE250 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 2,300 people worldwide, and with
production facilities in four countries, Chemring meets the needs
of customers in more than fifty countries
-- Chemring is 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 ("R&D"), Chemring has the agility to
rapidly react to urgent customer needs
www.chemring.co.uk
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END
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