chemring019
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION
Highlights:
- Aggregate cash consideration for Mecar and Simmel of up to €167.8 million (£138.0 million) from Nexter Systems SA, following a competitive sale process.
- This strategic disposal re-shapes the Group for future growth and enables Chemring to refocus on its core competencies.
- Chemring will become a focused defence technology business with well-established positions in Sensors & Electronics, Countermeasures and Energetic Systems.
- Significant reduction in pro-forma net debt of £120.4 million from £248.7 million at 31 October 2013 to £128.3 million.
- Net Disposal proceeds will be applied to repay part of the Group’s revolving credit facility with the balance offered to holders of the Group’s loan notes, with whom it has agreed improved arrangements.
- Since Chemring’s IMS released on 27 February 2014, there has been no material change to the Group’s current trading and prospects. The Disposal is expected to have a dilutive effect on underlying earnings per share in the current financial year ending 31 October 2014.
- The Disposal is conditional, inter alia, upon the approval of Chemring shareholders and regulatory approval in Italy.
Mark Papworth, Chief Executive Officer of Chemring, said:
“The sale of our European Munitions Business implements a key recommendation of our strategic review and represents a significant milestone as we reposition Chemring for future growth. It not only enables us to strengthen our balance sheet through the reduction of net debt, but also provides us with flexibility to invest in our core technologies. Following the Disposal, Chemring will have technologies, products and market positioning which provide opportunities to achieve sustainable high margins and revenue growth.”
This summary should be read in conjunction with the full text of this announcement.
A circular containing further details of the Disposal and a notice convening a general meeting of the Company will be sent to Shareholders as soon as is practicable.
Enquiries:
| Chemring Group PLC |
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01489 881880 |
| Mark Papworth |
Chief Executive |
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| Steve Bowers |
Finance Director |
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| Rupert Pittman |
Group Director of Communications and Investor Relations |
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| Moelis & Company (Financial Adviser to Chemring) |
020 7634 3500 |
| Liam Beere |
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| Edward Eppler |
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| Investec Bank plc (Sponsor and Corporate Broker to Chemring) |
020 7597 4000 |
| Keith Anderson |
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| Christopher Baird |
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| MHP Communications (Financial PR Adviser to Chemring) |
020 3128 8100 |
| Andrew Jaques |
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| John Olsen |
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James White
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This announcement has been issued by, and is the sole responsibility of, Chemring.
Moelis & Company UK LLP (“Moelis & Company”), which is authorised and regulated by the Financial Conduct Authority (“FCA”), is acting exclusively for Chemring in relation to the Disposal. Moelis & Company is not acting for any other person and Moelis & Company will not be responsible to any person other than Chemring for providing the protections afforded to clients of Moelis & Company or for providing advice in relation to the Disposal or in relation to the contents of or any transaction or arrangement referred to in this announcement.
Investec Bank plc, which is authorised by the Prudential Regulation Authority (“PRA”) and regulated by the FCA and the PRA, is acting exclusively for Chemring in relation to the Disposal. Investec is not acting for any other person and Investec will not be responsible to any person other than Chemring for providing the protections afforded to clients of Investec or for providing advice in relation to the Disposal or in relation to the contents of or any transaction or arrangement referred to in this announcement.
Forward-looking statements
Certain statements made in this announcement constitute forward-looking statements. Forward-looking statements can be identified by the use of words such as "may", "will", "should", "predict", "assurance", "aim", "hope", "risk", "expect", "intend", "estimate", "anticipate", "believe", "plan", "seek", "continue" or other similar expressions that are predictive or indicative of future events. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Group's expectations, intentions and beliefs concerning, amongst other things, the Group's results of operations, financial position, growth strategy, prospects, dividend policy and the industries in which the Group operates, are forward-looking statements. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Group and its Directors, which may cause the actual results, performance, achievements, cash flows, dividends of the Group or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. As such, forward-looking statements are no guarantee of future performance.
Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. Among the important factors that could cause the Group's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, economic conditions in the relevant markets of the world, market position of the Company or its subsidiaries, earnings, financial position, cash flows, return on capital and operating margins, political uncertainty, the actions of competitors, activities by governmental authorities such as changes in taxation or regulation, changing business or other market conditions and general economic conditions and such other risk factors as may be identified in the “Risk Factors” section of the Circular. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this announcement and are not intended to give assurance as to future results. The Company will update this announcement as required by applicable law, including the City Code, Listing Rules, Prospectus Rules and/or the Disclosure and Transparency Rules of the FCA, but otherwise expressly disclaims any such obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Chemring's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Conference call and presentation
A conference call for analysts and investors will be held at 8.15 a.m. this morning. Dial in details are as follows:
Access number: +44 (0)20 3059 8125
Password: Chemring
A short presentation on the proposed Disposal is due to be available to view on the Chemring website www.chemring.co.uk/investors later today.
Photography
Original high-resolution photography is available to the media by contacting Ben Griffiths, MHP Communications: [email protected] / Tel: 0203 128 8100.
View the full press release in PDF format.