19th Jan 2017 08:15
LONDON (Alliance News) - Defence countermeasures maker Chemring Group PLC on Thursday said it swung to profit in the year to the end of October thanks to substantially higher revenue and an improvement in trading in the second half.
The company said it made a pretax profit of GBP11.1 million in the year to October 31, compared to a GBP400,000 loss a year before. The profit growth was driven by revenue rising to GBP477.1 million from GBP377.3 million, up 26% thanks in part to translating US dollar sales into a weak pound. In constant currencies, sales were up 17%.
Chemring said its operational and financial performance improved in the second half of the year thanks to strong deliveries of 40mm ammunition and due to the favourable impact of a weak pound. It has also made good progress on its research and development programmes.
The group said its order book at the end of October was GBP592.9 million, up from GBP569.6 million at the end of its prior financial year, with GBP368.0 million of this to be recognised as revenue in its 2017 financial year.
Chemring said it will pay a final dividend of 1.30 pence per share, having not paid a final dividend a year before. Its total payout will be 1.30p after it did not pay an interim dividend. The year prior, it paid a 2.10p interim dividend, so the payout for the 2015 financial year was higher.
"2016 was a busy year for Chemring, both from a corporate and operational perspective, and it is pleasing to see that the efforts of so many have delivered a positive result. Order intake and revenue has been solid across the group, and strong in the Energetics segment. Subsequent to the completion of the rights issue and with good cash conversion, the balance sheet is now strengthened, positioning us well for the future," said Chief Executive Michael Flowers.
Chemring shares were up 1.2% to 169.75 pence on Thursday morning.
By Sam Unsted; [email protected]; @SamUAtAlliance
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