TIDMCHG
RNS Number : 8869L
Chemring Group PLC
11 September 2019
FOR IMMEDIATE RELEASE 11 SEPTEMBER 2019
CHEMRING GROUP PLC
TRADING UPDATE
Chemring Group PLC ("Chemring" or "the Group") today issues a
trading update for the period to 10 September 2019.
Current trading
Trading in the period has progressed as planned and the Board's
current expectations for the year ending 31 October 2019 remain
unchanged.
The Group's order book (continuing operations) at 31 August 2019
was GBP480m, providing good visibility for the remainder of the
financial year and beyond.
Sector Update
Sensors & Information
The period has seen continued strong performance from the
Sensors & Information sector.
The information security market, in which Roke is a leading
participant, was buoyant in the period. Roke has been selected as a
prime industrial partner on the UK MOD's Defence Science and
Technology Laboratory's ("Dstl") SERAPIS framework. This six-year
research framework focuses on new mission critical capabilities for
C4ISR communication systems and networks, space systems, synthetic
environments, and simulation technology. Roke has been awarded Lot
1 of six capability areas, and will also work with industrial
partners on three other Lots.
US DOD deliveries have continued as planned on the Husky Mounted
Detection System program, as has work on the Engineering
Manufacturing Development phase of the Chemical & Biological
Programs of Record.
Countermeasures & Energetics
Performance across the Countermeasures & Energetics sector
has been in line with the Board's expectations.
Chemring Countermeasures USA ("CCM USA") was recently awarded
four contracts in support of the US Navy and US Air Force. Initial
deliveries under these contracts are expected in the 2019 financial
year and provide a strong platform for 2020. The detail of these
awards is covered in a separate announcement, released today.
The phased re-start of our UK Countermeasures business, CCM UK,
progresses to plan. Spectral and MTV production lines returned to
operation in the third quarter with planned steady state
manufacturing expected by the end of the current financial year as
previously disclosed.
CCM UK has also agreed a new supply framework agreement with the
UK MOD. This is a seven year framework for the supply of air and
naval countermeasures.
Following Chemring Australia's closure in the first half of our
financial year to be fitted and qualified for F-35 countermeasure
manufacturing, production resumed early in the second half and is
ramping up to a three-shift production pattern to meet customer
demands.
The niche Energetics businesses have continued to perform well,
with order intake and deliveries remaining robust. The UK
Energetics business, CEUK, is in advanced discussions with the UK
MOD to establish a similar framework agreement to CCM UK for the
supply of its energetic products.
Exit of Commoditised Energetics Businesses
On 24 June 2019 Chemring announced the completion of the sale of
its pyrotechnics business Chemring Defence UK Limited for a nominal
cash consideration.
A process to exit the Group's one remaining commoditised
energetics business in Florida is ongoing and the Group will
provide further updates when appropriate.
Financial position
Investment in safety and the modernisation and automation of our
manufacturing sites has continued, and net debt at 31 August 2019
was GBP98m (30 April 2019: GBP84m). We expect the phasing of
trading in FY19 to result in a weighting of operating cash
generation to the final quarter.
Michael Ord, Chief Executive of Chemring, commented:
"This has been a busy period in which we have continued to make
good progress and it is pleasing to see the execution of our
strategy flow into the receipt of significant orders. Roke's
selection as a prime partner to Dstl is evidence of the focused
effort we have made to grow the business. The contract wins and
long-term framework agreements in Countermeasures supports the
Group's investment in its facilities, and position these businesses
well for the future. Overall, we have good momentum as we head to
the year end and the start of FY20."
-ENDS-
For further information:
Rupert Pittman Group Director of Corporate Affairs, 01794
833901
Chemring Group PLC
Andrew Jaques MHP Communications 0203 128 8100
Oliver Hughes
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 ("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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