CHEMRING GROUP PLC REPORTS CONTIUNING PROGRESS AND ACQUISITION OF ALLIED DEFENSE
19 Jan 10. PRELIMINARY RESULTS FOR THE YEAR ENDED 31 OCTOBER 2009
*Revenue up 42% to £503.9m (2008: £354.2m)
*Year end order book up 37% at £559.0m (2008: £409.0m)
*Net debt of £122.8m (2008: £116.7m) up 5%, representing gearing of 45% (2008: 51%)
*Underlying profit before tax* up 38% to £102.6m (2008: £74.2m)
*Underlying earnings per share* up 33% at 213p (2008: 160p)
*Profit before tax up 66% to £95.8m (2008: £57.7m)
*Basic earnings per share from continuing operations up 62% at 199p (2008: 123p)
*Dividend per ordinary share up 43% at 50p (2008: 35p)
DIVISIONAL HIGHLIGHTS
Both Energetics and Countermeasures performed strongly and achieved record years
ENERGETICS
*Year end order book of £327m, up 16% (2008: £281m)
*Revenue of £320m, up 63% (2008: £197m)
*Excellent contribution from NIITEK following its acquisition in December 2008
*Continued strong growth at Simmel
*Newly formed Chemring Ordnance business unit in USA performed well in first full year
*Acquisition of Hi-Shear completed in November 2009
*Conditional acquisition of The Allied Defense Group, Inc. for $59m
(£36m) announced today
COUNTERMEASURES
*Year end order book of £232m, up 81% (2008: £128m)
*Revenue of £184m, up 17% (2008: £157m)
*Record production at Chemring Countermeasures and Alloy Surfaces
*Commencement of building of new production facilities in the UK and Australia
Ken Scobie, Chemring Group Chairman, commented: “It is very satisfactory to report another year of substantial growth in earnings, combined with excellent cash generation and a strong balance sheet. During 2009, three significant landmarks were reached -Group revenue exceeded £500m; underlying profit before tax exceeded £100m; and our market capitalisation increased to over £1bn. All three are major achievements that highlight the growing stature of the Group.
The Group’s success over the last decade has been achieved through a clearly defined policy of organic growth, a focused programme of acquisitions, well-executed post-acquisition integration, and subsequent investment in product and facilities to deliver further expansion. The Board believes that there is ample opportunity to continue this policy in
Europe, the USA and other countries around the world, where joint ventures or new start-ups could be the preferred option.
With our wide spread of customers, products and capabilities, and our considerable abilities to respond rapidly to the military’s requirements, I am very confident of our continuing long term success. Our proven strategy, the strength of our order book, the impact of our enlarged sales force, the contribution from our latest acquisitions, and our secure financial fundamentals should ensure that the Group will continue in 2010 with the progress of the last decade.”
* Before goodwill adjustment arising from recognition of tax losses, intangible amortisation arising from business combinations and gain/( loss) on fair value movements on derivatives of £6.8m (2008: £16.5m)
Allied Defense Group, Inc.
At the same time, Chemring Group PLC announced that it has entered into a
conditional agreement to acquire the entire issued stock capital of The Allied Defense Group, Inc. (“ADG”), a US public company traded on the NYSE AMEX, for a cash consideration of $7.25 per share equating to $59 million (£36m).
Description of the business and reasons for the acquisition
ADG, which is headquartered in Virginia, USA, has two principal operating subsidiaries – Mecar S.A., based in Nivelles, Belgium, and Mecar USA, Inc., based in Marshall, Texas. Mecar S.A. is a niche manufacturer of medium and large calibre ammunition, particularly for modern, light armoured vehicles. Mecar USA provides load, assemble and pack and procurement services for the US Government and prime contractors.
In the year ended 31 December