TIDMCHG
RNS Number : 9349B
Chemring Group PLC
06 October 2022
FOR IMMEDIATE RELEASE
06 OCTOBER 2022
CHEMRING GROUP PLC
("Chemring" or "the Group")
FY22 TRADING UPDATE AND CONTRACT WINS
FY22 Trading update
Trading in the period to 30 September 2022 has progressed as
planned, despite the challenging macro-economic environment in
which we continue to operate.
Expected FY22 revenue is fully covered by the order book and the
outturn for the year ending 31 October 2022 is expected to be in
line with the Board's expectations.
As previously announced, the results for the year ending 31
October 2022 will be released on 13 December 2022.
The Group has received a number of significant orders during the
period, detailed below. As at 30 September 2022, the order book was
GBP678m (30 April 2022: GBP488m), with GBP40m of the increase
attributable to FX translation arising from the stronger US Dollar.
Order cover for FY23 is building, with Countermeasures &
Energetics having 93% order cover of expected revenue and the
shorter cycle Sensors & Information sector having 60%
cover.
Contract awards - Roke
In the Sensors & Information sector our specialist
consulting and technology business, Roke, has received a
significant award under the Serapis* framework contract with the UK
Government. This contract - Hyperion - will develop the next
generation of phased array radar technologies to address the
challenges associated with hypersonic missile defence. The
programme is sponsored by the UK Missile Defence Centre. Following
an initial one-year scoping study Hyperion is entering the second
of four years to conduct demonstration phase activities culminating
in a trials programme. The total budget for Hyperion is GBP30m with
the demonstration phase valued at GBP26m. Hyperion will be
delivered by Roke through the DSTL Serapis Lot 1 framework.
Activity at Roke has remained extremely buoyant with order
intake in the year to date at GBP156m (2021: GBP89m), up 75%. Of
this GBP29m is "pass through" revenue under larger framework
contracts but after excluding this, order intake for Roke-delivered
products and services was up 60%.
As a result of this strong order intake we expect Roke to
achieve another record year in FY22, with revenue exceeding GBP100m
for the first time. This growth has been supported by increased
headcount, with Roke now employing 828 people (2021: 611),
including our 2022 intake of 71 graduates and apprentices who
joined in September, and the first Roke Academy cohort of 24 who
joined in July.
Contract awards - Countermeasures & Energetics
In the Countermeasures & Energetics sector Chemring's US
subsidiary, Chemring Countermeasures USA ("CCM USA"), has been
jointly awarded a $225m Indefinite Delivery / Indefinite Quantity
("IDIQ") framework contract to manufacture MJU-61A/B infra-red
countermeasures. This contract includes a five-year ordering
period, with work expected to be completed by August 2027. An
initial delivery order was placed at the time of the award split
60% in favour of CCM USA and 40% in favour of Armtec
Countermeasures. CCM USA's initial delivery order was $10m. This
initial award was followed by a further award of $28m, which was
made 100% in favour of CCM USA. All work will be performed at CCM
USA's new fully-automated manufacturing facility at Toone,
Tennessee.
CCM USA also received firm-fixed-price contracts totalling $36m
to manufacture MJU-64/B, MJU-66/B and XM219 aircraft decoy flares.
All work will be performed at CCM USA's facility in Chester
Township, Pennsylvania.
In the UK, Chemring Countermeasures UK ("CCM UK") received a
five-year contract valued at GBP34m to supply 55mm MTV air
countermeasures. CCM UK also received a GBP4m order to deliver
naval countermeasures. These international orders build on CCM UK's
existing order book and provide strong manufacturing demand
throughout 2023 and beyond. All work will be performed at CCM UK's
facility near Salisbury, UK.
Our three niche Energetics businesses, which design and
manufacture high precision engineered devices and specialist
materials, have also seen strong customer demand with order intake
up 63% to GBP116m (2021: GBP71m), demonstrating the value our
customers place on the high-reliability products provided by
Chemring in the critical areas of space, aerospace, defence and
industrial markets.
These significant order wins and growth in order intake across
both sectors demonstrates customer confidence in Chemring to
develop and supply highly effective solutions and builds on our
order cover for FY23, positioning the Group well for the
future.
Balance sheet
The Group's balance sheet remains robust, with net debt
throughout the period at less than 0.5x EBITDA and banking
facilities of cGBP160m which run to 31 December 2024, with options
to extend. Increasing interest rates are not expected to have a
material impact on the Group.
-ENDS-
* Serapis is a framework contract that enables DSTL, MOD and the
frontline commands to quickly and efficiently place contracts for
scientific and technical research and development. Serapis focuses
on developing and bringing into operation new and battle-winning
capabilities in: C4ISR (command, control, computers, communication,
intelligence, surveillance and reconnaissance), space systems,
synthetic environments and simulation technology to support human
capability development. Roke is the Prime Contractor for Serapis
Lot 1.
For further information:
Rupert Pittman Group Director of Corporate Affairs, 01794 463401
Chemring Group PLC
Andrew Jaques MHP Communications 0203 128 8170
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 FTSE-250 listed 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 2,400 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 sectors:
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.com
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END
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