17th Jan 2019 10:22
LONDON (Alliance News) - Chemring Group PLC hiked its dividend on Thursday as it said it continues to make progress despite deeper losses amid a jump in costs and lower revenue.
For the financial year that ended October 31, the defence and engineering firm's pretax loss deepened to GBP22.0 million from GBP6.7 million the year prior. This was after revenue fell 3.2% to GBP297.4 million from GBP307.1 million the year before.
Profit performance was hurt by a jump in one-off costs during the year. Non-underlying costs jumped to GBP46.9 million from GBP26.9 million the year prior. This was primarily due to legal costs of GBP12.8 million - compared to GBP400,000 the year prior - amid a fatality at one of its sites and GBP7.4 million in impaired development costs during the year.
On an underlying basis - excluding one-off costs - pretax profit widened 23% to GBP24.9 million from GBP20.2 million the year before.
"2018 was a mix of financial and operational progress, offset by the impact of the incident at our Countermeasures site in August," Chemring Chief Executive Officer Michael Ord said.
In August, Chemring reported one employee was killed and another injured at one of its countermeasure facilities in Salisbury, Wiltshire.
"We ended 2018 in line with our revised expectations," Ord continued. "Our trading since the start of the current financial year has been in line with the board's expectations across all businesses."
At the end of October, the order book at Chemring stood at GBP394 million. Of this, GBP242 million is expected to be recognised as revenue in financial 2019, it said. The year prior the total order book stood at GBP478 million.
Chemring proposed a 2.2 pence per share final dividend, 10% higher than the 2.0p paid the year prior. For the full year, the total dividend rose 10% to 3.3p from 3.0p the year before.
"With high technology products and market leading positions Chemring has the platforms for long-term future growth," Ord added. "We have already achieved a number of significant milestones on the journey to build a stronger business and will continue to focus our efforts on re-structuring, simplifying and strengthening the business in order to capitalise on our significant market opportunities."
Net debt at the end of October stood at GBP80.0 million, down from GBP87.6 million the year prior.
Ord - who joined the firm as CEO in July - explained he was "excited about the prospects of the group and look forward to making further progress in 2019."
Shares in Chemring were 1.1% higher at 159.39 pence on Thursday.
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