UK. Chemring Group PLC today issues an update on current trading and outlook, to coincide with the Company’s Annual General Meeting.

Friday, 17 March 2017


 Current trading

 The Group has started the year positively, continuing the momentum of the second half of last year. Order intake in the first four months of the year was in line with the Board’s expectations at £127.4m (28 February 2016: £88.9m).

 Revenue during the four month period to 26 February 2017 was £145.6m (28 February 2016: £106.5m), reflecting both the significant weakening of sterling and the fulfilment of contracts in the Energetics Systems division.

 The order book at 26 February 2017 was £556.9m (28 February 2016: £596.3m, 31 October 2016: £592.9m), the reduction since 31 October 2016, half being attributable to the weaker dollar against sterling and half to stable operational performance resulting in some order backlog being cleared.

 Balance sheet

Net debt at 26 February 2017 was £146.4m (28 February 2016: £141.4m, 31 October 2016: £87.6m). The increase in net debt since 31 October 2016 reflects the investment in working capital required to fund the execution of contracts in the Energetics division, which continue to perform well and, assuming an extension of the existing letter of credit is agreed, are expected to be strong contributors to 2017 performance. This investment is expected to be sustained at the half year, but partially reverse in the second half of the financial year.

 Dividend

The Company announced on 19 January 2017 that, in view of the Group's improved trading performance for 2016, the Board intended to pay a final dividend of 1.3p in respect of the year ended 31 October 2016. This year's notice of AGM omitted the resolution seeking shareholder approval for the payment of a final dividend of 1.3p per ordinary share. Accordingly, the Board will, in accordance with its powers under the Company’s articles of association, today declare a dividend in place of the proposed final dividend. The dividend will not require the approval of shareholders. The amount of this dividend shall be 1.3p per ordinary share. This dividend will be paid on 18 May 2017 to all shareholders who were on the Register of Members on 28 April 2017. The amount of the dividend and the timing of payment will therefore be the same as the final dividend previously proposed.

 Outlook

The Board’s expectations for trading for the full year remain unchanged. As expected, the seasonality of the business and customer requirements will mean that trading performance and cashflows will be weighted to the second half, but this is expected to be less pronounced than in the prior year.

Interim results for the six months ended 30 April 2017 will be announced on 22 June 2017.

 Michael Flowers

 

Chief Executive, Chemring Group PLC

+44 (0)1794 833901

Andrew Lewis

Group Finance Director, Chemring Group PLC

+44 (0)1794 833901

Rupert Pittman

Group Director of Corporate Affairs, Chemring Group PLC

+44 (0)1794 833901

James White

MHP Communications

+44 (0)20 3128 8100

Cautionary statement

This announcement contains unaudited information based on management accounts and 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 2,700 people worldwide, and with production facilities in four countries, Chemring meets the needs of customers in more than fifty countries

Chemring is now 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

Back to 2017

irectors’ remuneration policy and proposed new incentive plan

17 March 2017

The notice of annual general meeting (“AGM”) of Chemring Group PLC (the “Company”) to be held today, 17 March 2017, includes at resolution 2 a proposal to adopt a new directors’ remuneration policy (the “New Policy”), which would replace the existing directors’ remuneration policy, and at resolution 14 a proposal to establish the Chemring Incentive Plan (the “CIP”) in line with the New Policy. The New Policy was developed in line with the Investment Association’s Executive Remuneration Working Group alternative model proposals.

Following consultations with shareholders, the Company announces that it no longer intends to seek shareholders’ approval for the New Policy or the CIP at the AGM, and that the directors' remuneration policy and its associated metrics as approved by shareholders at the Company’s AGM held in 2016 will continue to apply.

Chairman Carl-Peter Forster said: “We have been actively engaging with shareholders regarding long-term incentives for some time and, while we received majority support for the proposed revised approach, the Board believes that the right course of action now is to withdraw the resolutions and consider these plans further.

“The Board continues to believe that revising the policy is necessary for retaining and attracting the right calibre of talent to ensure the continued sustainable growth of the business and we will re-engage with shareholders to reach a consensus on this important issue.”

For further information:

Daniel Dayan

Remuneration Committee Chair, Chemring Group PLC

01794 833901

Rupert Pittman

Group Director of Corporate Affairs, Chemring Group PLC

 

Andrew Jaques

MHP Communications

020 3128 8100

John Olsen

 

 

James White

 

 

Back to 2017

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Last Updated ( Friday, 17 March 2017 )