|
|
As reported |
At 2019
exchange rates |
|
| |
2020 |
Change |
2020 |
Change |
2019 |
| Continuing operations |
|
|
|
|
|
| Revenue (£m) |
402.5 |
+ 20% |
406.4 |
+ 21% |
335.2 |
| Underlying EBITDA* (£m)** |
74.6 |
+ 22% |
75.9 |
+ 24% |
61.2 |
| Underlying operating profit* (£m) |
54.7 |
+ 24% |
55.7 |
+ 27% |
44.0 |
| Underlying profit before tax* (£m) |
51.7 |
+ 31% |
52.7 |
+ 34% |
39.4 |
| Underlying basic earnings per share* (pence) |
15.1 |
+ 35% |
15.4 |
+ 38% |
11.2 |
| Statutory operating profit (£m) |
46.3 |
+ 48% |
|
|
31.3 |
| Dividend per share (pence) |
3.9 |
+ 8% |
|
|
3.6 |
| Net debt at 31 October 2020 (£m) ** |
48.2 |
- 36% |
|
|
75.7 |
Key points
- 2020 performance was ahead of the Board’s expectations with strong performance in both segments
- All businesses remained open and operational despite the challenges caused by COVID-19
- Safety remains a core value. Investment in the Group’s manufacturing infrastructure is driving improvements in safety, efficiency and enhancing operational resilience
- Strong growth in orders and revenue for Roke including strategically important first Electronic Warfare order for Resolve into the US DoD
- Good progress made 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 $107m in support of the F-35
- Continued progress on the US Programs of Record. Further orders received in the year for the next phase of HMDS delivery, with the IDIQ increased by $200m, and customer approval and contract awarded for Low Rate Initial Production for the EMBD programme
- Significant reduction in net debt from strong operational cash generation, partially offset by scheduled capital expenditure and the adoption of IFRS16
- Board’s expectations for 2021 are unchanged. Approximately 78% of expected 2021 revenue is covered by the order book
Michael Ord, Group Chief Executive, commented:
“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. We set ourselves demanding goals and our teams across the Group have risen to those challenges, delivering a financial performance that was ahead of the Board’s expectations.
“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.”
Notes:
* All profit and earnings per share figures in this news release relate to underlying business performance (as defined below) unless otherwise stated.
** The 2020 net debt balance reflects the initial recognition of a £6.5m finance lease liability and £1.8m of the increase in underlying EBITDA is as a result of applying IFRS 16 Leases (effective 1 November 2019). The 2019 net debt balance and underlying EBITDA have not been restated, in line with the modified retrospective approach taken.
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) |
74.6 |
0.5 |
75.1 |
| Operating profit (£m) |
54.7 |
(8.4) |
46.3 |
| Profit before tax (£m) |
51.7 |
(8.4) |
43.3 |
| Tax charge (£m) |
(9.1) |
0.5 |
(8.6) |
| Profit after tax (£m) |
42.6 |
(7.9) |
34.7 |
| Basic earnings per share (pence) |
15.1 |
|
12.3 |
| Diluted earnings per share (pence) |
14.8 |
|
12.0 |
| Group – discontinued operations: |
|
|
|
| (Loss)/profit after tax (£m) |
(0.1) |
0.1 |
- |
| Segments – continuing operations: |
|
|
|
| Sensors & Information EBITDA (£m) |
30.7 |
- |
30.7 |
| Sensors & Information operating profit (£m) |
27.4 |
(6.4)
|
21.0 |
| Countermeasures & Energetics EBITDA (£m) |
56.5 |
- |
56.5 |
| Countermeasures & Energetics operating profit (£m) |
39.9 |
(2.5) |
37.4 |
The adjustments to continuing operations comprise:
- amortisation of acquired intangibles of £8.9m (2019: £12.1m)
- gain on the movement in the fair value of derivative financial instruments of £0.5m (2019: £0.6m loss)
The discontinued operations loss after tax primarily relates to the businesses which were “held for sale” at 31 October 2018, which have subsequently been divested from the Group or closed during the last two years:
- operating loss of £0.1m (2019: £3.5m loss)
- exceptional items of £0.1m profit (2019: £3.8m loss)
- tax credit on the above of £nil (2019: £6.1m credit)
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 2020 financial information at the 2019 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 |
01794 463380 |
Andrew Jaques
James Bavister |
MHP Communications |
020 3128 8339 |
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 FTSE-250 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 2,300 people worldwide, and with production facilities in four countries, Chemring meets the needs of customers in more than fifty countries
- Chemring is organised under two strategic product sectors: 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
A video presentation and accompanying slides will be available at the Chemring Group results centre www.chemring.co.uk/investors/results-centre at 07.00 (UK time) on Tuesday 15 December 2020.
Photography
Original high resolution photography is available to the media by contacting Catherine Chapman, MHP Communications: [email protected] / tel: +44 (0) 20 3128 8339.
View the full press release in PDF format.