5th Jun 2019 09:33
LONDON (Alliance News) - Chemring PLC boosted its interim dividend Wednesday after profit and revenue performance improved despite ongoing disruption at one of its countermeasure facilities.
For the six months ended April, the defence engineering firm swung to a GBP4.3 million pretax profit from a GBP1.1 million loss the year prior. Revenue rose 4.7% to GBP139.3 million from GBP133.1 million the year before.
Profit performance was primarily helped by a sharp fall in exceptional costs to GBP5.6 million from GBP9.4 million the year prior. This was chiefly after legal and restructuring costs incurred the year before were not repeated.
Underlying pretax profit - excluding exceptional items - widened 19% to GBP9.9 million from GBP8.3 million the year before.
"Despite the previously announced manufacturing issues that impacted first half financial performance, I have been heartened by the manner in which colleagues from across the entire group have responded to the challenge of building a stronger and improved business," Chemring Chief Executive Officer Michael Ord said.
In August, one employee was killed and another injured in an accident at one of its UK countermeasure facilities in Salisbury and Wiltshire. This resulted in the suspension of operations.
"The Countermeasures market continues to see growth and significant orders were received in the period; it is against this market strength and our drive to improve safety and operational performance that we will continue to invest to modernise and automate our manufacturing facilities," Ord added. "The phased restart of the UK Countermeasures site remains on track with the site scheduled to be at steady state manufacturing by the end of the current financial year."
"Our Sensors & Information sector continues to perform strongly, with US Programs of Record progressing as deliveries on the HMDS IDIQ contract commenced," Ord continued. "Elsewhere the sector continues to focus on growth and expanding its product, services and capability offerings."
Chemring proposed a 1.2 pence per share interim dividend, up 9.1% from 1.1p the year before.
"With 95% of expected second half revenue in the current order book or delivered to date, the board's expectations for the current financial year are unchanged", Ord added.
Shares in Chemring were 0.5% higher at 156.60 pence on Wednesday.
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