20 Jan 09. Chemring Group PLC – Preliminary Results for the Year Ended 31 October 2008:
Revenue from continuing operations up 39% to £354.2m (2007: £254.7m); Record current order book of £585m, up 43% since the end of October 2008; year end order book up 38% at £409m (2007: £297m)
Record operating cash flow up 38% to £83.7m (2007: £60.6m), representing 99% conversion from underlying operating profit* of £84.9m (2007: £61.2m).
Underlying profit before tax from continuing operations* up 39% to £74.2m (2007: £53.2m).
Profit before tax from continuing operations up 16% to £57.7m (2007: £49.8m) Underlying earnings per share from continuing operations* up 43% at 160p (2007: 112p)
Basic earnings per share from continuing operations up 17% at 123p (2007: 105p)
Dividend per ordinary share up 40% at 35p (2007: 25p)
Both Energetics and Countermeasures performed strongly and achieved record years
Year end order book of £281m, up 58% on 2007
Revenue of £197m, up 54% on 2007 Simmel achieved an excellent second half performance with record sales and profits
Strong contribution from acquisitions made in 2008
Divisional operating profits of £46m in line with those of Countermeasures
Revenue of £157m, up 25% on 2007
Chemring Countermeasures and Kilgore achieved record sales and profits
Alloy Surfaces achieved record production volumes of decoys A$160m contract for Chemring Australia
Ken Scobie, Chemring Group Chairman, commented: “Once again I have the pleasure to announce another year of excellent performance, with a 39% increase in underlying profit before tax* to £74.2 m and a 43% increase in underlying earnings per share* to 160p. We enter 2009 with an excellent order book, an Energetics division growing rapidly but still in its youth, and several newly-acquired businesses determined to show the Group what they can achieve. The Countermeasures division will continue to produce solid earnings and cash flow. As a leading defence business, the issues associated with the current military operations around the world make many judgments difficult but looking to the future of the Group, these international tensions do not make the world look a safer place. In rapidly changing economic circumstances there are many imponderables which could affect the outcome for the next year. However, once again I believe we will experience another year of above average growth, with all-round solid financial performance.”
* Before goodwill adjustment arising from recognition of tax losses, intangible amortisation arising from business combinations and loss on fair value movements on derivatives of £16.5m (2007: £3.4m)
FT Comment: 21 Jan 09. Chemring, the maker of anti-missile decoys and pyrotechnics, expects growth this year but said it would curtail plans for acquisitions in light of the financial crisis. The company, which on Tuesday reported a record order book of £585m, said it expected defence budgets in the UK and the US to at least hold up for 2009 but warned economic uncertainties made longer-term spending difficult to predict. David Price, chief executive, said: “Both in the UK and the US, defence is not considered part of the fiscal stimulus, so the question is what will happen to defence.” In the past three years Chemring has made four acquisitions every year but Mr Price said it would now exercise “more caution”. He still expected another year of above-average growth and also revealed the company was in talks with a group in India over a joint venture to tap into the country’s fast-growing defence market. Sales for the year to October 31 jumped 39 per cent to £354.2m and pre-tax profits rose 16 per cent to £57.7m. The year-end order book was up 38 per cent to £409m.
The total dividend was increased 40 per cent to 35p, which will be paid out of earnings per share that rose 17 per cent to 123p. The shares fell 22p to £19.78 in early trade on Wednesday.