TIDMCHG
RNS Number : 6185L
Chemring Group PLC
14 September 2021
FOR IMMEDIATE RELEASE
14 SEPTEMBER 2021
CHEMRING GROUP PLC
SCHEDULED TRADING UPDATE
Chemring Group PLC ("Chemring" or "the Group") today issues a
scheduled trading update for the period to 13 September 2021.
Current trading
Trading in the period has progressed as planned despite the
challenging environment in which we continue to operate. The
outturn for the year ending 31 October 2021 is expected to be in
line with the Board's and current analyst expectations.*
The Group's order book at 31 August 2021 was GBP464m (30 April
2021: GBP450m), providing full visibility for the remainder of the
current financial year based on expected delivery schedules. Order
cover for FY22 is building, with Countermeasures & Energetics
having 67% order cover of expected revenue and the shorter cycle
Sensors & Information sector having 45% cover.
Financial position
We continue to invest in safety, operational excellence,
technology R&D, and the modernisation and automation of our
manufacturing facilities. This has been funded by continued strong
operating cash conversion, with net debt at 31 August 2021 at
GBP38m, (31 October 2020: GBP48m; 30 April 2021: GBP39m). We expect
to be able to maintain this strong level of operating cash
conversion through to year end which will further reduce the net
debt level.
Sector Update
Sensors & Information
The period has seen continued strong performance in the Sensors
& Information sector, with order intake up 7% compared to the
same period last year.
Roke's information security and technology markets have remained
buoyant, with strong customer demand in the national security
domain, and good strategic progress made in other areas. Our
expectation for the year is that Roke will maintain its recent
track record of double-digit growth and strong margins. The
acquisition of Cubica on 2 June 2021 has added further market
leading capabilities to Roke's technology portfolio and the
integration is progressing well.
We have invested in establishing Roke USA Inc. and are working
to secure further orders from our US customers for our Electronic
Warfare ("EW") systems, a number of which are currently on trial
with the US Army.
Our US Sensors business continues to perform well, with all our
US Programs of Record delivering to plan during the period.
We continue to support the US DoD in their test and evaluation
activities as we progress through the Engineering, Manufacturing
and Development phases of the AVCAD chemical agent detection, and
the sole source JBTDS biological agent detection Programs of
Record. The Low Rate Initial Production contract on the Enhanced
Maritime Biological Detection program has progressed positively and
we expect the customer to award a Full Rate Production contract
later this year.
Countermeasures & Energetics
Performance across the Countermeasures & Energetics sector
is progressing in line with our expectations.
Our Countermeasures & Energetics businesses continue to work
through some Covid-19 ("CV-19") related challenges associated with
the timely completion of customer acceptance tests, supply chain
resilience and production workforce resourcing. To date these have
not had a material impact on our ability to deliver to customer
requirements.
Whilst the process of doing business with government departments
has on some occasions slowed as a consequence of the change of
administration in the US and the continuation of CV-19 working
restrictions, the Countermeasures & Energetics sector received
orders totalling GBP74m in the period from 1 May 2021 to 31 August
2021.
The Tennessee countermeasures manufacturing capacity expansion
programme is progressing as planned, with major construction and
system commissioning milestones being met. The first incremental
revenues from this new facility are expected in the second half of
FY22.
Michael Ord, Chief Executive of Chemring, commented:
"This has been another busy period in which the resilience of
the Group has been further demonstrated. We continue to make good
progress against our strategic and operational goals, as such, our
expectations for FY21 are in line with current analyst expectations
.*
"We have good momentum as we move into FY22. I am confident the
focus we have placed on building a high quality, technology-based
business will enable us to take further advantage of our increasing
opportunities for growth in the coming years and our long-term
prospects remain strong."
-ENDS-
* The Group believes analyst forecasts for adjusted operating
profit for the year ended 31 October 2021 are in the range of
GBP56.0m to GBP59.6m, with a consensus of GBP57.5m.
For further information:
Rupert Pittman Group Director of Corporate Affairs, 01794 463401
Chemring Group PLC
Andrew Jaques MHP Communications 0203 128 8170
James Bavister
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 listed 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
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END
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