17th Sep 2014 08:48
LONDON (Alliance News) - Chemring Group PLC said Wednesday its expectations for the full year remain broadly unchanged as it said a fall in third quarter revenue was in line with forecasts, though it sounded a note of caution on its current trading environment.
The aerospace, defence and security technology provider said revenue in the three months to July 31 was GBP77.5 million, down from the GBP110.5 million a year earlier, but in line with its expectations.
Chemring's order book at the end of its fiscal third quarter was GBP417.5 million, 3.9% higher than the GBP401.8 million reported at the end of the second quarter. Of this order book, 25.8% is due for delivery in the current financial year.
The group said its trading environment remains challenging and the timing of international order placement remains difficult to predict. It said it expects its full-year results to be broadly in line with its expectations, absent any material change in customer behaviour.
Revenue in its countermeasures business fell 2.3%. In its US business, deferrals in customer order placement continued, but the company noted it signed a USD22.2 million order for infra-red decoys in August and said its Australian business has won a AUD5 million deal to become a qualified supplier of flares for the F-35 Joint Strike Fighter platform.
In its UK countermeasures business, Chemring said the resolution of technical problems associated with the development of its advanced countermeasure product meant this is anticipated to be ready for customer acceptance in the current financial year.
Sensors & electronics revenue fell 55%, amid a shift from urgent operational requirements to long-term US Department of Defense contracts. Under the US DoD's Programs of Record, Chemring has won a USD26.1 million contract for the next generation of the Husky Mountain Detection System. It has also won USD3.9 million across three initial research and development deals for the Next Generation Chemical Detector Program of Record.
Revenue for the group's energetic systems segment was down 4.4%, with order intake falling 17%. Since the period end, the company said orders totalling GBP53.5 million has been won from US and Middle East customers providing essential base load manufacturing activity.
Chemring said its financial position has improved following the disposal of the European Munitions business. At July 31, the group's net debt was down to GBP116.8 million, from GBP229.2 million.
Chemring shares were down 0.9% to 234 pence on Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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