SPACE and defence technology company Chemring group yesterday reported that cancelled orders were impacting profitability.
Revenues were up 23.8 per cent, to £119m from £96.1m this time last year, but several major orders, including radar technology for a Middle Eastern customer, have not gone ahead as planned, meaning that the company’s net debt will increase by the end of October to £150m-£160m.
The group reported orders were up 17.8 per cent from last year, with orders from the Middle East accounting for almost a fifth of the order book. In particular, the company said more than £100m-worth of 40mm ammunition was ordered from the region.
Chemring says the increase in Middle Eastern business, in large part due to the activities of IS, will offset the expected loss of a US government Department of Defence contract for ammunition, which was announced this summer.
The sale of its European munitions business in April 2014 almost halved the group’s net debt last year, bringing it down to £128.3m, but it is creeping up again as it deals with ongoing contract delays.
The company said it still expects to meet forecasts of £422.3m revenues and operating profit of £49.3m.