27th Feb 2014 14:16
LONDON (Alliance News) - Chemring Group PLC Thursday maintained its full-year expectations, but cautioned that exchange rate movements had hit its revenue in the quarter ended January 31.
Revenue fell to GBP118.3 million in the three months, down from GBP136.1 million in the previous year.
Chemring designs, manufactures and sells counter measures for explosives and other military threats. Its order intake increased 2.1% compared to the previous year as it saw increased penetration in non-NATO markets.
In the company's Countermeasures business, performance continued to stabilise, Chemring said, although order intake remained slow as customers deferred orders. In February 22, an employee at its Kilgore facility in Tennessee was fatally injured, which led to production being suspended. It said it will gradually re-start manufacturing at the facility during the first week of March.
In Sensors & Electronics, revenue was 11% down from the previous year, hampered by a strong comparative period. Chemring expects a final order of Husky Mounted Detection Systems from the US Department of Defense in the second half of the year.
Pyrotechnics and Munitions revenue dropped 17% compared to the previous due to the timing of deliveries to its Middle East customers. It noted that it had seen an improved performance from its Chemring Ordnance business.
In Energetic Sub-Systems revenue dropped 26% compared to the previous year, which it said was due to the phasing of activity that will be more weighted towards the second half. Chemring said it is focusing on resolving production issues and integrating manufacturing sites in this segment.
Chemring said its process of reshaping and strengthening its portfolio through the disposal of its non-core activities is ongoing, but market conditions are expected to remain challenging.
Shares in Chemring were trading down 3.3% at 260.25 pence Thursday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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