15th Dec 2020 09:49
(Alliance News) - Shares rose in Chemring Group PLC on Tuesday as it announced double-digit rises for annual profit and revenue, both ahead of management expectations.
Shares in the Romsey, Hampshire-based defence technology firm were 12% higher at 303.50 pence on Tuesday, the strongest performer in the FTSE 250.
For the year to the end of October, Chemring posted a pretax profit of GBP43.3 million, up 62% from GBP26.7 million the year before, as non-underlying costs dropped to GBP8.4 million from GBP12.7 million.
On an underlying basis - excluding one-off costs - pretax profit rose by 30% to GBP51.7 million from GBP39.7 million the prior year.
Revenue grew by 20% year-on-year to GBP402.5 million from GBP335.2 million, as Chemring's countermeasures facilities in Salisbury and Australia remained operational throughout the period.
In addition, the group got a strong performance from its Sensors & Information segment, with continued progress on the US Programs of Record - a US Department of Defense acquisition programme - as well as momentum in the Roke business.
Order intake for the year was up 6.3% to GBP436.6 million from GBP410.6 million, driven by the release of further delivery orders under the HMDS IDIQ contract, and orders awarded to the Australian and US countermeasures businesses.
Chemring declared a final dividend of 2.6 pence per share, bringing the total payout to 3.9p, up 8.3% from 3.6p the prior year.
Looking ahead, Chemring said trading so far in its current financial year is in line with expectations, and the group's expectations for the period remains unchanged. Chemring has an order book of GBP476 million, of which GBP326 million, or 78%, is set to be recognised as revenue.
"Trading since the start of the current financial year has been in line with expectations. With 78% of 2021 expected revenue covered by the order book, the board's expectations for 2021 performance remain unchanged. Chemring is well placed, with a robust strategy, market-leading positions across different geographies and sectors, and with products and services that are critical to our government and blue-chip customers. Chemring's long-term prospects remain strong," said Chief Executive Michael Ord.
By Dayo Laniyan; [email protected]
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