Press releases

INTERIM RESULTS FOR THE SIX MONTHS TO 30 APRIL 2015

Continuing operations	2015	2014
Revenue	£161.7m	£208.8m
Underlying operating profit1	£5.5m	£22.4m
Underlying (loss)/profit before tax1	£(1.3)m	£13.4m
Net debt at 30 April	£148.5m	£229.2m
Net debt at 31 October		£135.6m
Underlying (loss)/earnings per share1	(0.5)p	5.4p
Dividend per share2	2.4p	2.4p
Total operating (loss)/profit	£(8.3)m	£14.1m
(Loss)/profit before tax	£(15.1)m	£5.1m
Total (loss)/earnings per share	(5.6)p	2.4p

¹ Underlying measures referred to in this announcement are stated before costs relating to acquisitions and disposals, business restructuring and incident costs, profit/(loss) on disposal of businesses, items deemed to be of an exceptional nature, impairment of goodwill and acquired intangibles, impairment of assets held for sale, amortisation of acquired intangibles and gains/losses on the movement in the fair value of derivative financial instruments, as stated in the 2014 Annual Report and Accounts. Further details of underlying and total measures are shown in notes 3 and 6.
² The interim dividend of 2.4p per ordinary share will be paid on 25 September 2015 to shareholders on the register at 4 September 2015. The ex-dividend date is 3 September 2015.

Highlights

• Significant reduction in H1 profit, due to delays in order receipts and customer acceptance
• Full year expectations unchanged - more than 75% of required H2 revenue now in order book
• Order book £502.8 million at 30 April 2015 (2014: £401.8 million), £208.8 million for delivery in the current year
• Significant orders exceeding £50.0 million received since period end, with deliveries scheduled to start in H2, and further material orders expected to be secured in H2 in all three segments
• Key strategic wins on long-term US Sensors & Electronics development programmes
• Restructuring of operations to reflect long-term programmes and opportunities
• Interim dividend maintained at prior-year level

Michael Flowers, Group Chief Executive of Chemring, commented:

“Prolonged negotiations and delays in the receipt of significant Middle East orders mean that we expect a heavy weighting of this year’s performance towards the second half. The receipt of orders exceeding £50.0 million since the period end, coupled with further significant orders expected to be won and the resolution of certain operational issues, is expected to result in a strong second half performance. We are taking the necessary steps to enable delivery of these orders to commence in the current financial year. Having carefully scrutinised the status of the order pipeline and subject to receipt of key orders in the coming months, our expectations for the full year remain unchanged.

The first half of 2015 has seen ongoing implementation of Chemring’s strategy, with significant success on long-term counter-IED, chemical and biological detection programmes for the US Department of Defense. Overall, we are making good strategic and operational progress, and look forward with increasing optimism to the longer-term potential of the Group being delivered.”

For further information:

Michael Flowers	Group Chief Executive, Chemring Group PLC	01794 833901
Steve Bowers	Group Finance Director, Chemring Group PLC	01794 833901
Rupert Pittman	Group Director of Communications and Investor Relations, Chemring Group PLC	01794 833901
John Olsen James White	MHP Communications	0203 128 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 3,000 people worldwide, and with production facilities in four countries, Chemring meets the needs of customers in more than fifty countries
• Chemring is organised under three strategic product segments: Countermeasures, Sensors & Electronics, and Energetic Systems
• 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 Tuesday 23 June 2015. The presentation can also be listened to at that time by dialling +44 (0) 20 3059 8125 and using the participant password ‘Chemring’. A recording of the audio webcast will be available later that day.

Photography
Original high resolution photography is available to the media by contacting Jennifer Iveson, MHP Communications: [email protected] / tel: 0203 128 8100.

View the full press release in PDF format.