Chemring posts rise in interim profits, announces Cubica acquisition

Chemring posted a rise in interm profit and revenue on Thursday as it announced the acquisition of Cubica Group, a Surrey-based research and development company specialising in artificial intelligence, machine learning, data fusion and autonomy.

In the six months to 30 April, underlying pre-tax profit increased 12% to £27.2m on revenue of £198.5m, up 4% on the same period a year ago. The company declared an interim dividend per share of 1.6p, up 23%.

Chemring said the results were in line with its expectations, "reflecting continued strong performance in both segments, despite FX translation headwind caused by the weakening US dollar".

The company highlighted double-digit growth in orders, revenue and operating profit for its Roke business, as the market remains "buoyant", underpinned by the UK government’s increased focus on cyber and electromagnetic activities, digital infrastructure and science and technology. Roke provides technology, engineering and advisory services to Government and high-value engineering companies.

Chief executive Michael Ord said: "Chemring's positive first half performance again demonstrates the progress that we continue to make in building a higher quality technology-based group. With strong order cover for the full year the group remains on track to deliver year-on-year growth, and the board’s expectations for the full year remain unchanged.

"Whilst our modernisation and operational excellence programmes will continue, our focus is now shifting towards the growth of our Sensors & Information segment, where our market leading positions and investment in high technology niches positions us well in this area of growing customer requirement."

Chemring also announced the acquisition of Cubica Group for an undisclosed sum. It said the deal creates further opportunities for the company to enhance and accelerate growth in its Roke business.

"Roke's customers require an exponential increase in capability to achieve digital advantage against complex threats," it said. "Cubica's leading edge capability in Machine Augmented Intelligence and Autonomy complements Roke's existing capabilities in cyber security, intelligence and electronic warfare, offering customers a force multiplier for their missions."