|
|
As reported |
At H1 2018
exchange rates |
|
| |
2019 |
Change |
H1 2019 |
Change |
H1 2018 |
| Continuing operations |
|
|
|
|
|
| Revenue (£m) |
335.2 |
+ 13% |
326.2 |
+ 10% |
297.4 |
| Underlying EBITDA*(£m) |
61.2 |
+ 22% |
59.7 |
+ 19% |
50.0 |
| Underlying operating profit* (£m) |
44.0 |
+ 42% |
42.6 |
+ 37% |
31.0 |
| Underlying profit before tax* (£m) |
39.4 |
+ 58% |
38.2 |
+ 53% |
24.9 |
| Underlying earnings per share* (pence) |
11.2 |
+ 62% |
10.9 |
+ 58% |
6.9 |
| Statutory operating profit/(loss) (£m) |
31.3 |
|
|
|
(15.9) |
| Dividend per share (pence) |
3.6 |
+ 9% |
|
|
3.3 |
| Net debt at 31 October 2019 (£m) |
75.7 |
- 7% |
|
|
81.8 |
Key points
- Overall performance slightly ahead of our initial expectations, reflecting strong Sensors & Information sector performance.
- Safety remains our key priority and, together with enhancing operational stability and efficiency, is driving investment in the Group’s manufacturing infrastructure.
- Completed sale of Chemring Military Products and Chemring Defence and closure of Chemring Prime Contracts. Announced sale of Chemring Ordnance on 21 November 2019.
- Australian subsidiary, offline for the majority of the year to enable changeover to F-35 countermeasure manufacturing, received two significant contracts, as previously announced.
- Continued progress on various US Programs of Record. Further delivery orders received under the HMDS IDIQ; successful critical design review on AVCAD led to a further 75 unit order.
- Strong order intake in Countermeasures & Energetics resulted in a Group order book for the continuing business at year end of £449m (2018: £394m), £287m currently due as revenue in FY20, approximately 76% coverage of FY20 targeted revenue.
- Net debt decreased year on year, reflecting strong operating cash generation offset by the start of investment in the Tennessee facility. Net debt: EBITDA fell to 1.24x (2018: 1.64x).
- Board recommending a final dividend of 2.4p per ordinary share, giving a total dividend of 3.6p per ordinary share (2018: 3.3p).
- Board’s expectations for FY20 trading performance remain unchanged, with the usual seasonal H2 weighting.
Michael Ord, Group Chief Executive, commented:
“It has been an exceptionally busy year in which we continued to deliver our current mission of building a stronger business. We have implemented significant changes to improve safety, strengthen leadership and corporate governance, and embed continuous improvement across the Group. We have also changed the structure of the business and the way in which we operate. In doing so we are improving the quality of the business and redefining our purpose. Collectively we are changing the culture of Chemring to one of close collaboration, responsible behaviour and belief in our core values of Safety, Excellence and Innovation.
With a number of significant operational and strategic milestones achieved this year we have made real progress; moving away from commoditised product lines to focus on higher quality, sustainable business areas where we have a competitive advantage.
As we continue to develop, over time our focus will move to strategic opportunities that further enhance the Group’s growth potential and the delivery of positive returns for all our stakeholders.”
Notes:
* All profit and earnings per share figures in this news release relate to underlying business performance (as defined below) unless otherwise stated.
The principal Alternative Performance Measures (“APMs”) presented are the underlying measures of earnings which exclude discontinued operations, exceptional items, gain or loss on the movement on the fair value of derivative financial instruments, the amortisation of acquired intangibles and the associated tax impact on these items. The Directors believe that these APMs improve the comparability of information between reporting periods as well as reflect the key performance indicators used within the business to measure performance. The term underlying is not defined under IFRS and may not be comparable with similarly titled measures used by other companies.
A reconciliation of underlying measures to statutory measures is provided below:
| Group – continuing operations: |
Underlying |
Non-underlying |
Statutory |
| EBITDA (£m) |
61.2 |
(0.6) |
60.6 |
| Operating profit (£m) |
44.0 |
(12.7) |
31.3 |
| Profit before tax (£m) |
39.4 |
(12.7) |
26.7 |
| Tax charge (£m) |
(7.9) |
4.3 |
(3.6) |
| Profit after tax (£m) |
31.5 |
(8.4) |
23.1 |
| Basic earnings per share (pence) |
11.2 |
|
8.2 |
| Diluted earnings per share (pence) |
11.0 |
|
8.1 |
| Group – discontinued operations: |
|
|
|
| Profit/(loss) after tax (£m) |
2.7 |
(3.9) |
(1.2) |
| Segments – continuing operations: |
|
|
|
| Sensors & Information EBITDA (£m) |
29.3 |
- |
29.3 |
| Sensors & Information operating profit (£m) |
26.3 |
(6.6) |
19.7 |
| Countermeasures & Energetics EBITDA (£m) |
41.7 |
- |
41.7 |
| Countermeasures & Energetics operating profit (£m) |
27.5 |
(5.5) |
22.0 |
The adjustments to continuing operations comprise:
- amortisation of acquired intangibles of £12.1m (2018: £11.6m)
- loss on the movement in the fair value of derivative financial instruments of £0.6m (2018: £0.4m)
- tax impact on adjustments of £4.3m credit (2018: £13.1m charge)
The discontinued operations loss after tax comprises:
- operating loss of £3.5m (2018: £8.0m profit)
- exceptional items of £1.0m (2018: £72.0m)
- loss on disposal of a subsidiary of £2.8m (2018: £nil)
- tax credit on the above of £6.1m (2018: £1.0m charge)
Further details are provided in notes 3 and 4.
EBITDA is defined as profit before interest, tax, depreciation and amortisation. Reference to constant currency relates to the re-translation of FY19 financial information at the FY18 exchange rates to reflect the movement excluding the impact of foreign exchange. The exchange rates applied are disclosed in note 11.
For further information:
| Rupert Pittman |
Group Director of Corporate Affairs, Chemring Group PLC |
+44 (0) 1794 833901 |
Andrew Jaques
Oliver Hughes |
MHP Communications |
+44 (0) 20 3128 8100 |
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, Chemring has the agility to rapidly react to urgent customer needs
www.chemring.co.uk
Presentation
The presentation slides and a live audio webcast of the presentation to analysts will be available at the Chemring Group results centre www.chemring.co.uk/investors/results-centre at 09.30 (UK time) on Monday 16th December 2019. The presentation can also be listened to at that time by dialling +44 (0)20 3936 2999 and using the participant access code: 41 49 27. A recording of the audio webcast will be available later that day.
Photography
Original high resolution photography is available to the media by contacting Isabella Grace, MHP Communications: [email protected] / tel: +44 (0) 20 3128 8100.
View the full press release in PDF format.