23rd Jan 2007 07:00
FOR IMMEDIATE RELEASE 23 JANUARY 2007 CHEMRING GROUP PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 OCTOBER 2006Results
- Revenue from continuing operations ‚£187.7 million (2005: ‚£121.0 million), up
55%
- Profit before tax from continuing operations ‚£31.8 million (2005: ‚£19.2
million), up 66%
- Basic earnings per ordinary share from continuing operations 70.33p (2005:
46.63p), up 51%- Dividend per ordinary share 16.00p (2005: 10.50p), up 52%- Basic earnings per ordinary share 44.33p (2005: 30.16p), up 47%
Highlights
- Excellent performance from all three Countermeasures businesses - total profits
up 37% and record levels of production achieved
- Strong performance by acquired Energetics companies - revenue more than doubled
to ‚£69.3 million
- Increase in total Group operating margins to 20% - second half Energetics
margin also up to 20%
- Year end order book up 75% - current order book at record high of ‚£246.0
million- Strong operational cash flow of ‚£45.6 million (2005: ‚£21.1 million)- Divestment of Marine division substantially complete
Commenting on the results, Ken Scobie, Chemring Group Chairman, said: "2006 hasbeen a year of dynamic progress and outstanding performance, as anticipated inmy closing comments in last year's annual report. Operating profit and profitbefore tax both increased by over 65% to ‚£37.8 million (2005: ‚£22.9 million)and ‚£31.8 million (2005: ‚£19.2 million) respectively, with basic earnings pershare (on continuing operations) on the enlarged share capital following thevendor placing in March 2006 rising by 51% to 70.33p (2005: 46.63p). In view ofthe excellent performance of the Group this year, the Board is recommending afinal dividend of 11.20p per ordinary share, a 53% increase on the finaldividend for 2005.
Both the Countermeasures and Energetics divisions contributed strongly in the year, and there was a welcome improvement in Energetics' margins which increased to 15% (2005: 8%).
Our acquisitions completed in the latter part of 2005 and during 2006 - NobelEnergetics in Scotland, Comet in Germany, Technical Ordnance in the US andLeafield Engineering in England - all contributed as anticipated. In 2007 wewill enjoy a full year's profits from the businesses acquired in 2006.In last year's annual report I outlined the Board's strategy of concentratingon our two divisions of Countermeasures and Energetics. This strategy remainsunchanged. In Countermeasures we are capitalising on our industry strengths,developing new decoys and new military uses for our specialised pyrophoricmaterial, and investing in plant, equipment and new production processes toreduce manufacturing costs and improve quality. In Energetics we continue oursearch for suitable acquisitions to make us a consolidating force in afragmented industry.In the year under review basic earnings per share from the continuingoperations increased by 51% to 70.33p, the share price reached over ‚£16 from ‚£6.60, and the Group was admitted to the FTSE 250 Index. Whilst it would beunrealistic to believe that such outstanding performance could be repeatedcontinuously in the longer term, the Board believes that with the currentrecord order book, a full twelve months' earnings from each of the companiesnow in the Group, and the opportunities for our product range at a time ofpolitical and military uncertainty, not just in the Middle East, furthersignificant growth is achievable in 2007." For further information:Ken Scobie Chairman 0207 930 0777Dr David Price Chief Executive 0207 930 0777Paul Rayner Finance Director 0207 930 0777Rupert Pittman Cardew Group 0207 930 0777 CHEMRING GROUP PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 OCTOBER 2006 Results
Revenue from continuing operations increased 33% to ‚£160.4 million (2005: ‚£121.0 million). Net operating profits from continuing operations increased 46%to ‚£33.4 million (2005: ‚£22.9 million). Net operating margins from continuingoperations were 21% (2005: 19%).
Revenue from acquired businesses was ‚£27.3 million and ‚£4.3 million of operating profit was generated at a margin of 16%.
Total revenue was ‚£187.7 million (2005: ‚£121.0 million), an increase of 55%.Total operating profit was ‚£37.8 million (2005: ‚£22.9 million), an increase of65%.An analysis of total revenue and operating profit by business segment is setout below: Operating Operating profit profit Revenue 2006 Revenue 2005Segment ‚£m ‚£m Margin ‚£m ‚£m Margin Countermeasures 118.4 33.9 29% 90.8 24.8 27% Energetics 69.3 10.4 15% 30.2 2.3 8% Amortisation of acquired intangibles - (0.8) - (0.1) Share-based payments - (2.2) - (0.9) Unallocated head office costs - (3.5) - (3.2) Total 187.7 37.8 20% 121.0 22.9 19% The revenue of the Countermeasures division grew 30% and the operating profitgrew 37%. The revenue of the Energetics division grew 129% and the operatingprofit grew nearly five times.
The interest charge for the year was ‚£6.1 million (2005: ‚£3.8 million). Interest was covered 6.2 times (2005: 6.0 times) by operating profits.
Profit before tax was ‚£31.8 million (2005: ‚£19.2 million), an increase of 66%.The tax charge of ‚£9.9 million (2005: ‚£5.7 million) represents a rate of 31%(2005: 29%) on profits. Profit after tax was ‚£21.9 million (2005: ‚£13.6million), an increase of 61%.OperationsCountermeasures
- Orders: ‚£173.7 million ¢â€ ’ up 87%
- Revenue: ‚£118.4 million ¢â€ ’ up 30%
- Operating profit: ‚£33.9 million ¢â€ ’ up 37%
- Operating margin: 29% (2005: 27%)
The global expendable countermeasures market continued to grow in 2006 and nowstands at about ‚£215 million, an increase over the year of nearly 20%. Theturnover of the Countermeasures division grew by 30% year-on-year, increasingour market share to over 55%. However, our order intake during the yearincreased significantly more (up 87%) during the year, with sales limited bythe speed with which increased production capacity and new products could besafely introduced. The strong demand for our decoys has continued to be drivenprincipally by the threat from shoulder-launched missiles to the helicoptersand transport aircraft used in peacekeeping operations by the US, UK and othercoalition forces in Iraq and Afghanistan.Alloy Surfaces had another excellent year, generating $114.6 million of sales,with strong demand for its special material decoys, particularly for theprotection of US Army helicopters. The ramp-up of production capacity, byextending plant two by 18,000 ft2 and building a third production facility of40,000 ft2, was delivered to schedule. The monthly production target of 60,000M211 decoys was achieved in September, in line with the customer'srequirements. With a total of $108 million of orders for the M211 decoy fromthe US Army alone, order cover is already in place for production at this ratethroughout 2007 and 2008.Kilgore performed exceptionally well in 2006, achieving consistent high volumeproduction with daily production rates regularly 100% above that achieved inthe previous year. Record volumes of nearly 1.9 million M206 and MJU-7A/B decoyflares were produced and delivered to the US Air Force customer. A strongfocus was also placed on process improvements during the year and this provideda considerable improvement in the margin achieved.Chemring Countermeasures, our UK business, also had an excellent year, withstrong demand for its latest airborne decoy products to support UK operationsin Afghanistan. A series of orders for aerodynamic and dual spectral flareshave been placed by the UK Ministry of Defence over the last twelve months.Production start-up of the aerodynamic flares was achieved rapidly andconsistent volume production continues to take place. Development andqualification of the spectral flare took place during the first half of theyear and production ramp-up towards 20,000 units per month is underway. A newspectral flare production facility is nearing completion, to provide theadditional production capacity needed to meet the rapid growth in volumesdemanded by the customer.The market outlook for our Countermeasures businesses continues to be positive.Over the next three years, we believe that the global market will expand byaround 12% each year. The short term growth is driven by a number of majorfactors. The peacekeeping activities in Afghanistan have grown in importanceover the last twelve months and senior UK and US military have consistentlyindicated the long term nature of the deployment. Both the US and the UK areconsidering further increases in the number of troops deployed. The UK hasrecently increased the number of helicopters used in operations and its demandfor decoys has continued to grow strongly.
Energetics
- Orders: ‚£95.2 million ¢â€ ’ up 222%
- Revenue: ‚£69.3 million ¢â€ ’ up 129%
- Operating profit: ‚£10.4 million ¢â€ ’ up 352%
- Operating margin: 15% (2005: 8%)
During 2006, the Group successfully acquired four new companies in the Energetics sector. All of these companies have made a positive start and, together with Nobel Energetics, acquired in September 2005, contributed excellent profits and cash flow.
The profitability of the enlarged Energetics division grew to ‚£10.4 million, avery satisfying result, which represents a 15% operating margin for the year.However, the second half of the year, bolstered by the presence of the newhigher margin acquisitions, generated an impressive operating margin of 20%,and provided a better insight into the future profitability expected from thisdivision.PW Defence had a strong year and continued to develop its product range to meetthe current market conditions. A multi-spectral hand thrown screening smoke foruse in urban environments was developed during the year, and a substantialorder for the product was received from a NATO country. A novel composition forIR illumination ("blacklight") was also developed, and this is now being usedby another NATO country. The business also had a major international success bysecuring a substantial prime contract from a Middle Eastern country to supplyan extensive range of third party military products over the next three years.Record sales levels were achieved at Nobel Energetics, driven by strong demandfor metron actuators, detonators, propellants and rocket motors. Sales ofactuators grew by 35%, driven by demand from fire suppression systems, cashsecurity and automotive bonnet release systems. There was also strong demand(up 20%) for ejector seat propellant from Martin Baker. The business completeddevelopment of the rocket motor for the NLAW missile and started to build-upvolume production.Kilgore made good progress on several of its key energetic product programmes.The redesign of the Mk58 marine location marker was completed, with successfulflight qualification trials on both helicopter and F/A-18 platforms. The US AirForce placed a record production order and volume production of nearly 19,000markers (worth $6 million) is now underway. The development of a newair-launched illumination flare was also completed during the year. A newignition train is now being fitted to improve its insensitive munitions (IM)performance and qualification on several aircraft platforms will take place inearly 2007. Comet also had a good year, with strong interest shown in both its mineclearance and battlefield simulation products. France, Spain and Australiaplaced orders for the PEMBS mine clearance system, and the UK Ministry ofDefence selected the system for its next generation Dismounted Counter-MineCapability (DCMC). The US Army placed a five year contract for the MECSbattlefield simulation ammunition, and strategic partnerships have been signedwith several US/European training prime contractors for the supply of micro/macro pyrotechnic devices for urban warfare and IED training systems.Technical Ordnance performed extremely well during its first seven months underour new ownership. Over 7.7 million impulse cartridges were manufactured forthe US Air Force, its principal customer. Detonator and booster pellets werealso manufactured in very large quantities for assembly into munition fuzingsystems manufactured by ATK, KDI and Kaman Aerospace. Access to the Group'sglobal sales network also brought a major success, with the award of animportant prime contract from another substantial Middle East customer.In September, we announced the acquisition of B.D.L. Systems Limited, anexplosive ordnance disposal (EOD) company located in Poole, UK. BDL is a worldleader in RF initiation products, and has just completed a number of upgradesto its mini-RABS system used globally for military engineering/demolitionpurposes. New secure coding techniques and secure firing mechanisms have beenincorporated. BDL has also secured a number of key prime contracts for EODequipment, including the supply and support of a wide range of equipment forboth the Iraqi forces (through the US programme office) and an importantcustomer in the Far East.Energetics can be sub-divided into munitions, EOD and pyrotechnic segments. The global market for energetic materials used in munitions is substantial,amounting to some ‚£2 billion each year. At present, our activities amount toonly ‚£15 million of sales per annum, and there are significant opportunities toexpand our product range of primers, detonators, propellants, tracers andpyrotechnic payloads. The combined capabilities of our two acquiredbusinesses, Nobel Energetics and Leafield Engineering, have significantlyenhanced our capabilities in this area, and our planned product investment willextend our range of products and provide opportunities to penetrate the marketfurther. In addition, the combined capabilities of Technical Ordnance andKilgore have given us a similar capability in the US and tremendous opportunityfor the cross-transfer of products and technology.
Strategy
The Group strategy remains focused on our two core sectors of operations, Countermeasures and Energetics.
The core strategy for the Countermeasures business is to maintain and improveour market share, and carefully exploit the continuing market growth over thenext few years. We intend to increase our investment in new products and tobuild on our leadership in both special material and spectral decoys. We alsointend to invest in new automated production facilities, to drive furthermanufacturing efficiencies and to maintain our lead role in the development ofnew products for the next generation of fixed wing and rotary aircraft.We intend to continue the expansion of our Energetics division, with newacquisitions in both the US and Europe. We will focus on becoming a keysupplier of energetic materials to the major prime contractors for munitions.We intend to build on our expertise in explosive ordnance disposal (EOD) anddevelop the capability to become a specialist prime contractor. We also plan toinvest in new products to expand our pyrotechnic business and develop clearleadership in both the detonator and cartridge activated device markets.
The Board of Directors and Senior Executive Management
During the year we were delighted to welcome The Rt Hon Lord Freeman to theBoard. Roger Freeman has a wealth of experience, having enjoyed senior rolesin the financial and defence industry sectors, and was formerly a Governmentminister in the Ministry of Defence. He has assumed the position of Chairman ofthe Audit Committee.
We also appointed two senior executives to strengthen our operational management during the year. Mike Helme joined the Group in January 2006 as Managing Director of the Energetics division, outside of the US, and Dan McKenrick, a US national, joined us in September 2006 as President of our US operations.
Acquisitions
During the year the Group acquired the following businesses:
Date Consideration acquired (including costs) ‚£m Comet GmbH 30 Nov 2005 7.2 Leafield Engineering Ltd 31 Jan 2006 5.2 Technical Ordnance, Inc. 13 Mar 2006 42.6 B.D.L. Systems Ltd 30 Sep 2006 10.2 Total consideration 65.2
Of the total consideration, ‚£39.0 million was funded by the draw down of medium term debt, with the balance of ‚£26.2 million funded by a vendor placing.
A summary of the fair value of assets acquired and the goodwill arising on acquisition is as follows:
‚£m Intangible assets 9.2 Fixed assets 5.3 Working capital 9.3 Tax (1.3) Cash 1.8
Fair value of assets acquired 24.3
Consideration (including costs) 65.2
Goodwill arising 40.9 Research and Development
Research and development expenditure totalled ‚£5.3 million (2005: ‚£4.2 million), an analysis of which is set out below:
2006 2005 ‚£m ‚£m
Customer funded research and development 2.1 2.5
Internally funded research and development 2.5 1.4
Capitalised development costs 0.7 0.3
Total research and development expenditure 5.3 4.2
The Group's policy is to write-off capitalised development costs over a threeyear period. Amortisation of development costs was ‚£0.4 million (2005: ‚£0.2million).PensionsThe Group's pension deficit before associated tax credits, as defined by IAS19Accounting for pension costs, was ‚£16.3 million (2005: ‚£20.2 million) adecrease of 19%. The two UK final salary schemes are currently undergoingtheir triennial actuarial valuations, with results expected to be finalised
inthe first half of 2007.Cash FlowOperating cash flow was ‚£45.6 million (2005: ‚£21.1 million), which represents aconversion rate of operating profit to operating cash of 121% (2005: 92%).Working capital balances were well controlled in the year and were kept belowincreases in Group revenues.
Group fixed asset expenditure was ‚£11.9 million (2005: ‚£8.0 million). The principal expenditure was in support of Alloy Surfaces' second and third facilities, and a large flare facility at Kilgore Flares.
A summary of Group cash flow is set out below:
‚£m Operating cash 45.6 Capital expenditure (11.9) Tax (10.6) Free cash flow 23.1 Interest (5.3) Dividends (3.7)
Net cash inflow before acquisitions and disposals 14.1
Net Debt
Net debt movements are summarised below:
‚£m Opening net debt (52.8)
Net cash inflow before acquisitions and disposals 14.1
Acquisitions and disposals (net of share placings) (34.1)
Foreign exchange movements 2.2 Closing net debt (70.6)
Gearing at the year end was 75% (2005: 93%).
Dividends
The Board is recommending a final dividend of 11.20p per ordinary share, a 53%increase on the final dividend for 2005. This, together with the interimdividend of 4.80p paid in August 2006, gives a total dividend for the year of16.00p, a 52% increase over 2005. The dividend is over four times covered onnet profits of the continuing operations. The shares will be marked "exdividend" on 28 March 2007 and the dividend is payable on 20 April 2007 toshareholders on the register at the close of business on 30 March 2007.
Discontinued Operations
The results of the discontinued operations represent those of the Marinedivision. In June 2006 the Lights business of McMurdo was sold, and inDecember 2006, a conditional agreement was entered into to sell McMurdo'sElectronics business to Signature Industries Limited. The agreement providesfor an earn out of up to ‚£1.5 million, if certain sales targets are achieved.The earn out proceeds will be cash accounted for as the proceeds are received.ICS Electronics remained unsold at the year end, and a decision was taken tofully impair the goodwill associated with this company, leaving net assets ofapproximately ‚£0.1 million.
A summary of the results of the discontinued operations follows:
2006 2005 ‚£m ‚£m Revenue 11.3 11.5 Pre-tax loss (8.9) (5.6) Tax 0.8 0.8 Post-tax loss (8.1) (4.8)
The pre-tax loss includes ‚£1.0 million of trading losses (2005: ‚£2.6 million), and ‚£7.9 million of impairment and loss on disposal charges (2005: ‚£3.0 million).
The net carrying value of the discontinued operations is ‚£4.2 million (2005: ‚£12.9 million), which is disclosed under assets for sale. Approximately ‚£2.8million is collectable when the sale to Signature Industries Limited completes,anticipated in Spring 2007, with the balance receivable from collection of
working capital balances.ProspectsIn the year under review basic earnings per share from continuing operationsincreased by 51% to 70.33p, the share price reached over ‚£16 from ‚£6.60, andthe Group was admitted to the FTSE 250 Index. Whilst it would be unrealistic tobelieve that such outstanding performance could be repeated continuously in thelonger term, the Board believes that with the current record order book, a fulltwelve months' earnings from each of the companies now in the Group, and theopportunities for our product range at a time of political and militaryuncertainty, not just in the Middle East, further significant growth isachievable in 2007. CHEMRING GROUP PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 OCTOBER 2006
SUMMARY FINANCIAL INFORMATION
Continuing Operations IFRS IFRS UK GAAP 2006 2005 2004 ‚£000 ‚£000 ‚£000 Revenue Countermeasures total 118,384 90,768 78,724 Energetics -continuing 42,058 30,195 31,360 operations -acquired 27,291 - - Energetics total 69,349 30,195 31,360 Total revenue 187,733 120,963 110,084 Operating profit -continuing operations 33,433 22,908 16,927 -acquired 4,346 - - Total operating profit 37,779 22,908 16,927 Profit before tax 31,760 19,216 13,315
Dividend per ordinary share 16.00p 10.50p 9.00p Basic earnings per ordinary share 70.33p 46.63p 33.32p Diluted earnings per ordinary share 69.87p 46.39p 33.14p
Net debt (‚£000) 70,554 52,774 30,008 Shareholders' funds (‚£000) 94,104 56,850 63,559 CONSOLIDATED INCOME STATEMENTfor the year ended 31 October 2006 2006 2005 Note ‚£000 ‚£000 Continuing operations Revenue -continuing 160,442 120,963 -acquired 27,291 - Total revenue 187,733 120,963 Operating profit -continuing 33,433 22,908 -acquired 4,346 - Total operating profit 37,779 22,908
Share of post-tax results of associate 84 130
Finance expense (6,103) (3,822)
Profit before tax for the year from 31,760 19,216
continuing operations Tax (9,873) (5,657)
Profit after tax for the year from 21,887 13,559
continuing operations Discontinued operations Loss after tax from discontinued (8,090) (4,790) operations Profit after tax for the year 13,797 8,769 Attributable to: Equity holders of 13,795 8,756 the parent Minority interests 2 13 Earnings per ordinary share From continuing operations: Basic 2 70.33p 46.63p Diluted 2 69.87p 46.39p
From continuing and discontinued
operations: Basic 2 44.33p 30.16p Diluted 2 44.04p 29.99p
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE for the year ended 31 October 2006
2006 2005 ‚£000 ‚£000 Gains on cash flow hedges 340 -
Movement on deferred tax relating to cash (98) - flow hedges Exchange differences on translation of (5,230) 67 foreign operations Actuarial gains/(losses) on defined benefit 4,685 (4,074) pension schemes Movement on deferred tax relating to pension (1,406) 1,222 schemes Tax on items taken directly to equity 1,868 119 Net income/(expense) recognised directly in 159 (2,666)
equity Profit after tax for the year 13,797 8,769
Total recognised income and expense for the 13,956 6,103 year Attributable to: Equity holders of the parent 13,954 6,090 Minority interests 2 13 CONSOLIDATED BALANCE SHEETas at 31 October 2006 2006 2005 ‚£000 ‚£000 ‚£000 ‚£000 Non-current assets Goodwill 72,664 34,680 Other intangible assets 11,863 3,470 Property, plant and 57,681 50,698 equipment Investments 1,033 1,068 Deferred tax 9,649 7,440 152,890 97,356 Current assets Inventories 36,252 27,821
Trade and other receivables 39,015 27,168 Cash and cash equivalents 13,411 7,774
Derivative financial instruments 178 - 88,856 62,763 Assets held for sale 6,516 14,646 Total assets 248,262 174,765 Current liabilities
Bank loans and overdrafts (11,523) (12,701)
Obligations under finance (435) (925) leases
Trade and other payables (39,538) (24,899)
Provisions (286) (170)
Current tax liabilities (1,928) (1,150) Liabilities held for sale (2,338) (1,776)
(56,048) (41,621) Non-current liabilities Bank loans (71,698) (46,320) Obligations under finance (309) (602) leases Other payables (210) (163) Deferred tax (9,486) (8,958) Preference shares (62) (62) Retirement benefit (16,345) (20,189) obligations (98,110) (76,294) Total liabilities (154,158) (117,915) Net assets 94,104 56,850 Equity Share capital 1,612 1,459 Share premium account 53,540 27,274 Special capital reserve 12,939 12,939 Hedging reserve 230 - Revaluation reserve 1,604 1,640 Retained earnings 23,900 13,261 Equity attributable to 93,825 56,573 equity holders of the parent Minority interest 279 277 Total equity 94,104 56,850 CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 October 2006 2006 2005 ‚£000 ‚£000 Note
Cash flows from operating activities Cash generated from operations A 45,629 21,141
Tax paid (10,588) (7,612)
Net cash inflow from operating activities 35,041 13,529 Cash flows from investing activities Dividends received from associate 107 108 Purchases of property, plant and equipment (10,148) (6,898) Purchases of intangible assets (1,798) (1,063) Proceeds on disposal of subsidiary 2,570 242 undertaking/division Proceeds on disposal of property, plant 98 8 and equipment
Acquisition of subsidiaries (net of cash (62,808) (22,009) acquired)
Net cash outflow from investing activities (71,979) (29,612) Cash flows from financing activities
Dividends paid (3,695) (2,736) Interest paid (5,261) (3,237) Proceeds on issue of shares 26,419 572 New borrowings 38,112 30,097 Repayment of borrowings (5,983) (4,130)
Net cash inflow from financing activities 49,552 20,566 Increase in cash and cash equivalents 12,654 4,483 during the year Cash and cash equivalents at start of the (2,970) (7,530) year Effect of foreign exchange rate changes (689) 77 Cash and cash equivalents at end of the
year 8,995 (2,970) NOTES TO THE CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 October 2006 2006 2005 A. Cash generated from operations ‚£000 ‚£000
Operating profit from continuing operations 33,433 22,908 Operating profit from acquired operations 4,346 - Operating loss from discontinued operations (646) (2,557) Loss on disposal/impairment of discontinued (7,970) (3,000)
operations Adjustment for:
Depreciation of property, plant and equipment 5,776 4,103 Amortisation of intangible assets 2,044 1,678
Impairment of goodwill 4,890 3,000
Impairment of intangible assets 782 - Difference between pension contributions paid and amount recognised in income statement (939) (875) Profit on disposal of property, plant and - 8
equipment Decrease in provisions (170) (456)
Operating cash flows before movements in
working capital 41,546 24,809 Increase in inventories (1,362) (5,696)
Increase in trade and other receivables (693) (1,073) Increase in trade and other payables 6,138 3,101 Cash generated from operations 45,629 21,141 Reconciliation of net cash flow to movement in net debt Increase in cash and cash equivalents during 12,654 4,483
the year
Cash inflow from increase in debt and lease (32,129) (25,967)
financing
Change in net debt resulting from cash flows (19,475) (21,484)
New finance leases (247) (103) Translation difference 2,252 (1,109)
Amortisation of debt finance costs (310) (70) Movement in net debt in the year (17,780) (22,766) Net debt at start of the year (52,774) (30,008) Net debt at end of the year (70,554) (52,774) Analysis of net debt As at Cash Non-cash Exchange As at 1 Nov flow changes movement 31 Oct 2005 2006 ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 Cash at bank and 7,774 6,119 - (482) 13,411 in hand Overdrafts (10,744) 6,535 - (207) (4,416) (2,970) 12,654 - (689) 8,995 Debt due within(1,957) 5,104 (10,469) 215 (7,107) one year Debt due after(46,320) (38,112) 10,159 2,575 (71,698) one year Finance leases (1,527) 879 (247) 151 (744) (52,774) (19,475) (557) 2,252 (70,554) Notes
1. Accounts and Auditors' Report
The financial information set out above does not constitute the Company'sstatutory accounts for the year ended 31 October 2006 or 31 October 2005 but isderived from those accounts. Statutory accounts for 2005 have been deliveredto the Registrar of Companies, and those for 2006 will be delivered followingthe Company's Annual General Meeting. The auditors have reported on thoseaccounts; their reports were unqualified and did not contain statements unders237(2) or s237(3) of the Companies Act 1985.The preliminary announcement has been prepared on the basis of the accountingpolicies as stated in the financial statements for the year ended 31 October2006.Whilst the financial information included in this preliminary announcement hasbeen computed in accordance with International Financial Reporting Standards(IFRSs), this announcement does not itself contain sufficient information tocomply with IFRSs. The Company expects to publish full financial statementsthat comply with IFRSs on 20 February 2007 (see Note 4 below).
2. Earnings per Ordinary Share
The earnings and shares used in the calculations are as follows:
From continuing and discontinued operations 2006 2005 Ordinary Ordinary shares shares Earnings Number EPS Earnings Number EPS ‚£000 000s Pence ‚£000 000s Pence Basic EPS 21,887 31,119 70.33 13,559 29,075 46.63 from continuing operations Basic EPS (8,090) - (26.00) (4,790) - (16.47) from discontinued operations Basic EPS 13,797 31,119 44.33 8,769 29,075 30.16 Diluted EPS 21,887 31,323 69.87 13,559 29,200 46.39 from continuing operations Diluted EPS (8,090) - (25.83) (4,790) - (16.40) from discontinued operations Diluted EPS 13,797 31,323 44.04 8,769 29,200 29.99
Ordinary shares are calculated by reference to the weighted average number of shares in issue in the year.
3. Dividend
The final dividend of 11.20p per ordinary share will be paid on 20 April 2007to all shareholders registered at the close of business on 30 March 2007. Theex-dividend date will be 28 March 2007. The total dividend for the year will be16.00p (2005: 10.50p). The final dividend is subject to approval by theshareholders at the Annual General Meeting, and accordingly, has not beenincluded as a liability in the financial statements for the year ended 31October 2006.
4. 2006 Financial Statements
The financial statements for the year ended 31 October 2006 will be posted toshareholders on 20 February 2007 and will also be available from that date atthe registered office, Chemring House, 1500 Parkway, Whiteley, Fareham,Hampshire PO15 7AF.
CHEMRING GROUP PLCRelated Shares:
Chemring