Chemring trades ahead of FY expectations

Advanced technology products and services group Chemring said on Tuesday that its full-year performance was ahead of expectations, with strong performances in both segments.

Chemring posted a 20% rise in annual revenues to £402.5m amid strong growth in orders at its Roke subsidiary, leading to a 22% jump in underlying earnings to £74.6m and a 31% improvement in pre-tax profits to £51.7m.

Underlying basic earnings per share increased 35% to 15.1p each, with Chemring also increasing its dividend per share 8% to 3.9p.

The FTSE 250-listed group, which highlighted that all of its businesses remained open and operational despite the challenges caused by Covid-19, also managed to cut net debt by 36% to £48.2m during the twelve months ended 31 October.

Chemring also stated that it had made "good progress" on securing new business in the UK, the US and Australia for the supply of global countermeasures, including the receipt by Chemring Australia of "a definitised contract" of $107.0m in support of the F-35.

Chief executive Michael Ord said: "Our focus in recent years has been on putting in place the foundations on which to build a stronger, higher quality business. The resilience of the group in response to the coronavirus pandemic is a consequence of the dedication and commitment of all our people and clearly demonstrates the significant progress that we have made.

"Trading since the start of the current financial year has been in line with expectations. With 78% of 2021 expected revenue covered by the order book, the board's expectations for 2021 performance remain unchanged. Chemring is well placed, with a robust strategy, market-leading positions across different geographies and sectors, and with products and services that are critical to our government and blue-chip customers. Chemring's long-term prospects remain strong."

As of 0810 GMT, Chemring shares were up 9.05% at 295.52p.