6th Oct 2022 10:13
(Alliance News) - Chemring Group PLC on Thursday said that it expects its full year results to be in line with expectations having received a number of "significant orders" during the period.
Shares in the Romsey, Hampshire-based defence technology manufacturer were trading 8.2% were trading at 329.50 pence each in London on Wednesday morning.
In a trading update ahead of its full year results, Chemring said that the order book at September 30 was GBP678 million, up from GBP488 million at April 30. GBP40 million of the increase was attributable to foreign exchange translation arising from the strong dollar.
The company noted that order cover for the 2023 financial year is building, with the Countermeasures & Energetics sector having 93% order cover of expected revenue.
Chemring Countermeasures USA, Chemring's US subsidiary, was awarded a USD225 million contract to manufacture MJU-61A/B infra-red countermeasures. Countermeasures are electrical or electronic devices designed to trick or deceive detection systems. This contract includes a five-year ordering period, with work expected to be completed by August 2027.
In the UK, Chemring Countermeasures received a GBP34 million five-year contract to supply MTV air countermeasures. It also received a GBP4 million order to deliver naval countermeasures.
The shorter cycle Sensors & Information sector also has 60% revenue cover for next year. Cheming's specialist consulting and technology business, Roke, has received a significant award under the UK government's Serapis framework.
Serapis is a framework contract that enables the Defence Science and Technology Laboratory, Ministry of Defence and the frontline commands to quickly and efficiently place contracts for scientific and technical research and development.
This contract will develop the next generation of phased array radar technologies to address the challenges associated with hypersonic missile defence. The total budget for Hyperion is GBP30 million with the demonstration phase valued at GBP26 million. Hyperion will be delivered by Roke through the Defence Science and Technology Laboratory Serapis Lot 1 framework.
As a result of this strong order intake we expect Roke to achieve another record year in the 20222 financial year, with revenue exceeding GBP100m for the first time.
The company said "these significant order wins and growth in order intake across both sectors demonstrates customer confidence in Chemring to develop and supply highly effective solutions and builds on our order cover for the financial year 2023, positioning the group well for the future."
Chemring noted increasing interest rates are not expected to impact its finances.
By Chris Dorrell; [email protected]
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