23rd Jan 2007 07:37
Please be advised that this announcement replaces the one made earlier this morningunder reference number PRNUK-2201071850-240E at 07:01hrs. The earlier announcement containedcorrupted text. This replacement has been issued to facilitate display on third partyvendor screens. 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: ‚£121.0million), up 55%- Profit before tax from continuing operations ‚£31.8 million (2005:‚£19.2 million), up 66%- Basic earnings per ordinary share from continuing operations70.33p (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 - totalprofits up 37% and record levels of production achieved- Strong performance by acquired Energetics companies - revenue more thandoubled to ‚£69.3 million- Increase in total Group operating margins to 20% - second half Energeticsmargin also up to 20%- Year end order book up 75% - current order book at record high of ‚£246.0million- Strong operational cash flow of ‚£45.6 million (2005: ‚£21.1 million)- Divestment of Marine division substantially completeCommenting on the results, Ken Scobie, Chemring Group Chairman,said: "2006 has been a year of dynamic progress and outstanding performance,as anticipated in my closing comments in last year's annual report. Operatingprofit and profit before 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 per share (on continuing operations) on the enlarged sharecapital following the vendor placing in March 2006 rising by 51% to 70.33p(2005: 46.63p). In view of the excellent performance of the Group this year,the Board is recommending a final dividend of 11.20p per ordinary share, a 53%increase on the final dividend 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 during2006 - Nobel Energetics in Scotland, Comet in Germany, Technical Ordnance inthe US and Leafield Engineering in England - all contributed as anticipated.In 2007 we will enjoy a full year's profits from the businesses acquired in2006.
In last year's annual report I outlined the Board's strategy of concentrating on our two divisions of Countermeasures and Energetics. This strategy remains unchanged. In Countermeasures we are capitalising on our industry strengths, developing new decoys and new military uses for our specialised pyrophoric material, and investing in plant, equipment and new production processes to reduce manufacturing costs and improve quality. In Energetics we continue our search for suitable acquisitions to make us a consolidating force in a fragmented industry.
In the year under review basic earnings per share from thecontinuing operations 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 itwould be unrealistic to believe that such outstanding performance could berepeated continuously in the longer term, the Board believes that with thecurrent record order book, a full twelve months' earnings from each of thecompanies now in the Group, and the opportunities for our product range at atime of political and military uncertainty, not just in the Middle East,further significant 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 2006Results
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 continuing operations 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 of 65%.
An analysis of total revenue and operating profit by businesssegment is set out below: Operating Operating profit profit Revenue 2006 Revenue 2005 ‚£m ‚£mSegment ‚£m Margin ‚£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 ofacquiredintangibles - (0.8) - (0.1) Share-basedpayments - (2.2) - (0.9) Unallocated headoffice 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 profit grew 37%. The revenue of the Energetics division grew 129% and the operating profit 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: ‚£13.6 million), an increase of 61%.
Operations
Countermeasures
- Orders: ‚£173.7 million -->up 87%
- Revenue: ‚£118.4 million -->up 30%
- Operating profit: ‚£33.9 million -->up 37%
- Operating margin: 29% (2005: 27%)
The global expendable countermeasures market continued to grow in2006 and now stands at about ‚£215 million, an increase over the year of nearly20%. The turnover of the Countermeasures division grew by 30% year-on-year,increasing our market share to over 55%. However, our order intake during theyear increased significantly more (up 87%) during the year, with sales limitedby the speed with which increased production capacity and new products couldbe safely introduced. The strong demand for our decoys has continued to bedriven principally by the threat from shoulder-launched missiles to thehelicopters and transport aircraft used in peacekeeping operations by the US,UK and other coalition forces in Iraq and Afghanistan.Alloy Surfaces had another excellent year, generating $114.6million of sales, with strong demand for its special material decoys,particularly for the protection of US Army helicopters. The ramp-up ofproduction capacity, by extending plant two by 18,000 ft2 and building a thirdproduction facility of 40,000 ft2, was delivered to schedule. The monthlyproduction target of 60,000 M211 decoys was achieved in September, in linewith the customer's requirements. With a total of $108 million of orders forthe M211 decoy from the US Army alone, order cover is already in place forproduction at this rate throughout 2007 and 2008.Kilgore performed exceptionally well in 2006, achieving consistenthigh volume production with daily production rates regularly 100% above thatachieved in the previous year. Record volumes of nearly 1.9 million M206 andMJU-7A/B decoy flares were produced and delivered to the US Air Forcecustomer. A strong focus was also placed on process improvements during theyear and this provided a considerable improvement in the margin achieved.Chemring Countermeasures, our UK business, also had an excellentyear, with strong demand for its latest airborne decoy products to support UKoperations in Afghanistan. A series of orders for aerodynamic and dualspectral flares have been placed by the UK Ministry of Defence over the lasttwelve months. Production start-up of the aerodynamic flares was achievedrapidly and consistent volume production continues to take place. Developmentand qualification of the spectral flare took place during the first half ofthe year and production ramp-up towards 20,000 units per month is underway. Anew spectral 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 tobe positive. Over the next three years, we believe that the global market willexpand by around 12% each year. The short term growth is driven by a number ofmajor factors. The peacekeeping activities in Afghanistan have grown inimportance over the last twelve months and senior UK and US military haveconsistently indicated the long term nature of the deployment. Both the US andthe UK are considering further increases in the number of troops deployed. TheUK has recently increased the number of helicopters used in operations and itsdemand for decoys has continued to grow strongly.
Energetics
- Orders: ‚£95.2 million -->up 222%
- Revenue: ‚£69.3 million --> up 129%
- Operating profit: ‚£10.4 million -->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 ‚£10.4million, a very satisfying result, which represents a 15% operating margin forthe year. However, the second half of the year, bolstered by the presence ofthe new higher margin acquisitions, generated an impressive operating marginof 20%, and provided a better insight into the future profitability expectedfrom this division.PW Defence had a strong year and continued to develop its productrange to meet the current market conditions. A multi-spectral hand thrownscreening smoke for use in urban environments was developed during the year,and a substantial order for the product was received from a NATO country. Anovel composition for IR illumination ("blacklight") was also developed, andthis is now being used by another NATO country. The business also had a majorinternational success by securing a substantial prime contract from a MiddleEastern country to supply an extensive range of third party military productsover the next three years.Record sales levels were achieved at Nobel Energetics, driven bystrong demand for metron actuators, detonators, propellants and rocket motors.Sales of actuators grew by 35%, driven by demand from fire suppressionsystems, cash security and automotive bonnet release systems. There was alsostrong demand (up 20%) for ejector seat propellant from Martin Baker. Thebusiness completed development of the rocket motor for the NLAW missile andstarted to build-up volume production.Kilgore made good progress on several of its key energetic productprogrammes. The redesign of the Mk58 marine location marker was completed,with successful flight qualification trials on both helicopter and F/A-18platforms. The US Air Force placed a record production order and volumeproduction of nearly 19,000 markers (worth $6 million) is now underway. Thedevelopment of a new air-launched illumination flare was also completed duringthe year. A new ignition train is now being fitted to improve its insensitivemunitions (IM) performance and qualification on several aircraft platformswill take place in early 2007.
Comet also had a good year, with strong interest shown in both its mine clearance and battlefield simulation products. France, Spain and Australia placed orders for the PEMBS mine clearance system, and the UK Ministry of Defence selected the system for its next generation Dismounted Counter-Mine Capability (DCMC). The US Army placed a five year contract for the MECS battlefield simulation ammunition, and strategic partnerships have been signed with 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 sevenmonths under our new ownership. Over 7.7 million impulse cartridges weremanufactured for the US Air Force, its principal customer. Detonator andbooster pellets were also manufactured in very large quantities for assemblyinto munition fuzing systems manufactured by ATK, KDI and Kaman Aerospace.Access to the Group's global sales network also brought a major success, withthe award of an important prime contract from another substantial Middle Eastcustomer.In September, we announced the acquisition of B.D.L. SystemsLimited, an explosive ordnance disposal (EOD) company located in Poole, UK.BDL is a world leader in RF initiation products, and has just completed anumber of upgrades to its mini-RABS system used globally for militaryengineering/demolition purposes. New secure coding techniques and securefiring mechanisms have been incorporated. BDL has also secured a number of keyprime contracts for EOD equipment, including the supply and support of a widerange of equipment for both the Iraqi forces (through the US programme office)and an important customer in the Far East.Energetics can be sub-divided into munitions, EOD and pyrotechnicsegments. The global market for energetic materials used in munitions issubstantial, amounting to some ‚£2 billion each year. At present, ouractivities amount to only ‚£15 million of sales per annum, and there aresignificant opportunities to expand our product range of primers, detonators,propellants, tracers and pyrotechnic payloads. The combined capabilities ofour two acquired businesses, Nobel Energetics and Leafield Engineering, havesignificantly enhanced our capabilities in this area, and our planned productinvestment will extend our range of products and provide opportunities topenetrate the market further. In addition, the combined capabilities ofTechnical Ordnance and Kilgore have given us a similar capability in the USand tremendous opportunity for 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 maintainand improve our market share, and carefully exploit the continuing marketgrowth over the next few years. We intend to increase our investment in newproducts and to build on our leadership in both special material and spectraldecoys. We also intend to invest in new automated production facilities, todrive further manufacturing efficiencies and to maintain our lead role in thedevelopment of new products for the next generation of fixed wing and rotaryaircraft.We intend to continue the expansion of our Energetics division,with new acquisitions in both the US and Europe. We will focus on becoming akey supplier of energetic materials to the major prime contractors formunitions. We intend to build on our expertise in explosive ordnance disposal(EOD) and develop the capability to become a specialist prime contractor. Wealso plan to invest in new products to expand our pyrotechnic business anddevelop clear leadership in both the detonator and cartridge activated devicemarkets.
The Board of Directors and Senior Executive Management
During the year we were delighted to welcome The Rt Hon LordFreeman to the Board. Roger Freeman has a wealth of experience, having enjoyedsenior roles in the financial and defence industry sectors, and was formerly aGovernment minister in the Ministry of Defence. He has assumed the position ofChairman of the Audit Committee.We also appointed two senior executives to strengthen ouroperational management during the year. Mike Helme joined the Group in January2006 as Managing Director of the Energetics division, outside of the US, andDan McKenrick, a US national, joined us in September 2006 as President of ourUS operations.Acquisitions
During the year the Group acquired the following businesses:
Date Consideration acquired (including costs) ‚£mComet GmbH 30 Nov 2005 7.2Leafield Engineering Ltd 31 Jan 2006 5.2Technical Ordnance, Inc. 13 Mar 2006 42.6B.D.L. Systems Ltd 30 Sep 2006 10.2Total 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:
‚£mIntangible assets 9.2Fixed assets 5.3Working capital 9.3Tax (1.3)Cash 1.8Fair value of assets acquired 24.3Consideration (including costs) 65.2Goodwill 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 three year period. Amortisation of development costs was ‚£0.4 million (2005: ‚£0.2 million).
PensionsThe Group's pension deficit before associated tax credits, asdefined by IAS19 Accounting for pension costs, was ‚£16.3 million (2005: ‚£20.2million) a decrease of 19%. The two UK final salary schemes are currentlyundergoing their triennial actuarial valuations, with results expected to befinalised in the first half of 2007.
Cash Flow
Operating cash flow was ‚£45.6 million (2005: ‚£21.1 million), which represents a conversion rate of operating profit to operating cash of 121% (2005: 92%). Working capital balances were well controlled in the year and were kept below increases 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:
‚£mOperating cash 45.6Capital expenditure (11.9)Tax (10.6)Free cash flow 23.1 Interest (5.3)Dividends (3.7)Net cash inflow before acquisitions and 14.1
disposals
Net Debt
Net debt movements are summarised below:
‚£mOpening net debt (52.8)Net cash inflow before acquisitions and 14.1
disposals
Acquisitions and disposals (net of share (34.1) placings) Foreign exchange movements
2.2Closing 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 ordinaryshare, a 53% increase on the final dividend for 2005. This, together with theinterim dividend of 4.80p paid in August 2006, gives a total dividend for theyear of 16.00p, a 52% increase over 2005. The dividend is over four timescovered on net profits of the continuing operations. The shares will be marked"ex dividend" 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 theMarine division. 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 ‚£mRevenue 11.3 11.5 Pre-tax loss (8.9) (5.6)Tax 0.8 0.8Post-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 ‚£2.8 million is collectable when the sale to Signature Industries Limited completes, anticipated in Spring 2007, with the balance receivable from collection of working capital balances.
Prospects
In the year under review basic earnings per share from 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. 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 ‚£000Revenue Countermeasures total 118,384 90,768 78,724 Energetics -continuing operations 42,058 30,195 31,360-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 63,559CONSOLIDATED INCOME STATEMENTfor the year ended 31 October 2006 2006 2005 Note ‚£000 ‚£000 Continuing operationsRevenue -continuing 160,442 120,963 -acquired 27,291 - 187,733 120,963 Total revenue 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 continuing 31,760
19,216
operations
Tax (9,873)
(5,657)
Profit after tax for the year from continuing 21,887
13,559
operations
Discontinued operationsLoss after tax from discontinued operations (8,090) (4,790) Profit after tax for the year 13,797 8,769
Attributable to: Equity holders of the parent 13,795
8,756
Minority interests 2 13 Earnings per ordinary shareFrom 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 hedgesExchange differences on translation of (5,230) 67foreign operationsActuarial gains/(losses) on defined 4,685 (4,074)benefit pension schemesMovement on deferred tax relating to (1,406) 1,222pension schemesTax on items taken directly to equity 1,868 119 Net income/(expense) recognised directly 159 (2,666)
in equity
Profit after tax for the year 13,797 8,769 Total recognised income and expense for 13,956 6,103the year Attributable to:Equity holders of the parent 13,954 6,090Minority interests 2 13 CONSOLIDATED BALANCE SHEETas at 31 October 2006 ‚£000 2006 ‚£000 2005 ‚£000 ‚£000 Non-current assetsGoodwill 72,664 34,680Other intangible assets 11,863 3,470Property, plant and equipment 57,681 50,698Investments 1,033 1,068Deferred tax 9,649 7,440 152,890 97,356Current assetsInventories 36,252 27,821Trade and other receivables 39,015 27,168Cash and cash equivalents 13,411 7,774Derivative financial instruments 178 - 88,856 62,763Assets held for sale 6,516 14,646 Total assets 248,262 174,765 Current liabilitiesBank loans and overdrafts (11,523) (12,701)Obligations under finance leases (435) (925)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 liabilitiesBank loans (71,698) (46,320)Obligations under finance leases (309) (602)Other payables (210) (163)Deferred tax (9,486) (8,958)Preference shares (62) (62)Retirement benefit obligations (16,345) (20,189) (98,110) (76,294) Total liabilities (154,158) (117,915) Net assets 94,104 56,850 EquityShare capital 1,612 1,459Share premium account 53,540 27,274Special capital reserve 12,939 12,939Hedging reserve 230 -Revaluation reserve 1,604 1,640Retained earnings 23,900 13,261 Equity attributable to equity 93,825 56,573holders of the parentMinority interest 279 277 Total equity 94,104 56,850 CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 October 2006 2006 2005 ‚£000 ‚£000 NoteCash flows from operating activitiesCash generated from operations A 45,629 21,141Tax paid (10,588) (7,612) 35,041 13,529 Net cash inflow from operatingactivities Cash flows from investing activitiesDividends received from associate 107 108Purchases of property, plant and (10,148) (6,898)
equipment
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 8and equipmentAcquisition of subsidiaries (net of (62,808) (22,009)
cash acquired)
Net cash outflow from investingactivities (71,979) (29,612) Cash flows from financing activitiesDividends paid (3,695) (2,736)Interest paid (5,261) (3,237)Proceeds on issue of shares 26,419 572New borrowings 38,112 30,097Repayment of borrowings (5,983) (4,130) Net cash inflow from financing 49,592 20,566
activities
Increase in cash and cash equivalents 12,654 4,483during the yearCash and cash equivalents at start of (2,970) (7,530)the yearEffect of foreign exchange rate changes (689) 77 Cash and cash equivalents at end of the 8,995 (2,970)
year
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 October 2006 2006 2005A. 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)operationsAdjustment for:Depreciation of property, plant and equipment 5,776 4,103Amortisation of intangible assets 2,044 1,678Impairment of goodwill 4,890 3,000Impairment of intangible assets 782 -
Difference between pension contributions paid (939) (875) and amount recognised in income statement Profit on disposal of property, plant and
- 8
equipment
Decrease in provisions (170) (456) Operating cash flows before movements in 41,546 24,809
working capital
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 movementin net debtIncrease in cash and cash equivalents during 12,654 4,483the yearCash inflow from increase in debt and lease (32,129) (25,967)financingChange 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 2005 flow changes movement 31 Oct 2006 ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 Cash at bank and in 7,774 6,119 - (482) 13,411handOverdrafts (10,744) 6,535 - (207) (4,416) (2,970) 12,654 - (689) 8,995
Debt due within one (1,957) 5,104 (10,469) 215 (7,107) year Debt due after one year (46,320) (38,112) 10,159 2,575 (71,698) 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 theCompany's statutory accounts for the year ended 31 October 2006 or 31 October2005 but is derived from those accounts. Statutory accounts for 2005 have beendelivered to the Registrar of Companies, and those for 2006 will be deliveredfollowing the Company's Annual General Meeting. The auditors have reported onthose accounts; their reports were unqualified and did not contain statementsunder s237(2) or s237(3) of the Companies Act 1985.
The preliminary announcement has been prepared on the basis of the accounting policies as stated in the financial statements for the year ended 31 October 2006.
Whilst the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that 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 discontinuedoperations 2006 2005 Ordinary EPS Earnings Ordinary EPS shares shares Earnings Number Number ‚£000 000s Pence ‚£000 000s Pence Basic EPS from continuing 21,887 31,119 70.33 13,559 29,075 46.63operationsBasic EPS from discontinued (8,090) - (26.00) (4,790) - (16.47)operations Basic EPS 13,797 31,119 44.33 8,769 29,075 30.16 Diluted EPS from continuing 21,887 31,323 69.87 13,559 29,200 46.39operationsDiluted EPS from discontinued (8,090) - (25.83) (4,790) - (16.40)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 20April 2007 to all shareholders registered at the close of business on 30 March2007. The ex-dividend date will be 28 March 2007. The total dividend for theyear will be 16.00p (2005: 10.50p). The final dividend is subject to approvalby the shareholders at the Annual General Meeting, and accordingly, has notbeen included 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 to shareholders on 20 February 2007 and will also be available from that date at the registered office, Chemring House, 1500 Parkway, Whiteley, Fareham, Hampshire PO15 7AF.
CHEMRING GROUP PLCRelated Shares:
Chemring