|
|
As reported |
At H1 2020
exchange rates |
|
| |
H1 2021 |
Change |
H1 2021 |
Change |
H1 2020 |
| Revenue (£m) |
198.5 |
+ 4% |
206.3 |
+ 8% |
191.0 |
| Underlying EBITDA*(£m) |
37.6 |
+ 7% |
39.5 |
+ 12% |
35.2 |
| Underlying operating profit* (£m) |
28.1 |
+ 10% |
29.6 |
+ 16% |
25.6 |
| Underlying profit before tax* (£m) |
27.2 |
+ 12% |
28.7 |
+ 19% |
24.2 |
| Underlying basic earnings per share* (pence) |
8.5 |
+ 20% |
9.0 |
+ 27% |
7.1 |
| Statutory operating profit (£m) |
25.2 |
+ 24% |
|
|
20.4 |
| Interim dividend per share (pence) |
1.6 |
+ 23% |
|
|
1.3 |
| Net debt at 30 April (£m) |
38.7 |
- 36% |
42.3 |
- 30% |
60.6 |
Highlights
- H1 performance was in line with our expectations reflecting continued strong performance in both segments, despite FX translation headwind caused by the weakening US dollar.
- Investment in the Group’s manufacturing infrastructure continues to be a key enabler to deliver improved safety performance and operational excellence. Total Recordable Injury Frequency Rate is at 0.66 versus 1.13 for the same period last year.
- Double digit growth in orders, revenue and operating profit for Roke as the market continues to be buoyant, underpinned by UK Government announced increased focus on Cyber and Electromagnetic Activities (“CEMA”), digital infrastructure, and science and technology.
- Acquisition of Cubica Group (see separate announcement published today)
- Continued progress in our US Sensors Programs of Record. Further orders received in the period for the next phase of HMDS delivery, valued at $63m, under the previously announced $200m IDIQ contract.
- Secured new long-term contracts in Countermeasures & Energetics, including Chemring Countermeasures USA receiving a five-year IDIQ contract for the supply of infra-red decoy flares and Chemring Energetics UK securing a 15 year long-term partnering agreement with Martin Baker Aircraft Company.
- Continued reduction in net debt with strong operational cash generation partially offset by scheduled capital expenditure. Net debt to underlying EBITDA of 0.5 times.
- New policy to target a medium-term dividend cover of c.2.5 times underlying EPS. Interim dividend increased by 23% to 1.6p.
- Board's full year expectations are unchanged (at current FX rates). Approximately 92% of expected H2 revenue is in the order book as at 30 April 2021.
Michael Ord, Chemring Group Chief Executive, commented:
“Chemring’s positive first half performance again demonstrates the progress that we continue to make in building a higher quality technology-based Group. With strong order cover for the full year the Group remains on track to deliver year on year growth, and the Board’s expectations for the full year remain unchanged.
Whilst our modernisation and operational excellence programmes will continue, our focus is now shifting towards the growth of our Sensors & Information segment, where our market leading positions and investment in high technology niches positions us well in this area of growing customer requirement. We are investing in our organic capabilities, both in the development of our technology and people. In addition we now have the financial flexibility to pursue both organic and inorganic growth opportunities.
The acquisition of Cubica Group is a small but important first step in driving further scale to our growing Roke business, and is further evidence of Chemring delivering against its strategy.
Whilst there may be some macro-economic uncertainty surrounding the level and timing of defence spending as a result of the Covid-19 pandemic, our multiple market leading positions and investment in high technology niches, provide attractive growth opportunities. Chemring’s long-term prospects remain strong.”
Notes:
*All profit and earnings per share figures in this news release relate to continuing 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, and the amortisation of acquired intangibles. 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.
EBITDA is defined as operating profit before interest, tax, depreciation and amortisation. Reference to constant currency relates to the re-translation of H1 2021 financial information at the H1 2020 exchange rates to reflect the movement excluding the impact of foreign exchange. The exchange rates applied are disclosed in note 12.
A reconciliation of underlying measures to statutory measures is provided below:
| Group – continuing operations: |
Underlying |
Non-underlying |
Statutory |
| EBITDA (£m) |
37.6 |
0.8 |
38.4 |
| Operating profit (£m) |
28.1 |
(2.9) |
25.2 |
| Profit before taxation (£m) |
27.2 |
(2.9) |
24.3 |
| Tax charge (£m) |
(3.3) |
0.4 |
(2.9) |
| Profit after tax (£m) |
23.9 |
(2.5) |
21.4 |
| Basic earnings per share (pence) |
8.5 |
(0.9) |
7.6 |
| Diluted earnings per share (pence) |
8.3 |
(0.9) |
7.4 |
| Segments – continuing operations: |
|
|
|
| Sensors & Information EBITDA (£m) |
16.6 |
- |
16.6 |
| Sensors & Information operating profit (£m) |
15.3 |
(2.6) |
12.7 |
| Countermeasures & Energetics EBITDA (£m) |
27.5 |
- |
27.5 |
| Countermeasures & Energetics operating profit (£m) |
19.3 |
(1.1) |
18.2 |
The adjustments to continuing operations comprise:
- amortisation of acquired intangibles of £3.7m (H1 2020: £4.4m, 2020: £8.9m)
- gain on the movement in the fair value of derivative financial instruments of £0.8m (H1 2020: £0.8m loss, 2020: £0.5m gain)
- tax impact of adjustments of £0.4m credit (H1 2020: £1.6m credit, 2020: £0.5m credit)
Further details are provided in note 3.
For further information:
| Rupert Pittman |
Group Director of Corporate Affairs, Chemring Group PLC |
+44 (0) 1794 463401 |
Andrew Jaques
James Bavister |
MHP Communications |
+44 (0) 20 3128 8170 |
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 2,300 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 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 (“R&D”), 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 Thursday 3 June 2021.
Analyst call
An analyst call will take place at 08.30 (UK time) on Thursday 3 June 2021. To receive dial in details please contact MHP Communications: [email protected]/ tel: +44 (0) 20 3128 8841.
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.