Orders from Middle East and Asia drive a surge in full-year profits at Chemring

City A.M. Reporter
BRITISH arms firm Chemring posted a 14 per cent rise in full-year profit yesterday, helped by growing sales in the Middle East and Asia, and said it is confident on its prospects for 2011.

Chemring, whose products help fighter planes avoid missile attacks, reported an underlying pre-tax profit of £116.8m on revenues 18 per cent higher at £597.1m for the year to the end of October 2010.

The company raised the dividend by 18 per cent to 59p and said the outlook for 2011 was good despite tighter defence budgets both at home and abroad.

“We remain confident that the United States represents an area of future growth in all of our market segments ... it is our non-NATO customers that represent the largest opportunity for growth over the next five years,” the company said.

“In 2010, our revenues from Middle East and Far East customers grew by over 60 per cent and we believe that future growth in these regions should be substantial.”

Chemring was expected to post an average full-year pre-tax profit of £119.6m, according to a consensus poll of nine analysts.

The company said its order book stood at a record £90m, up 54 per cent on January 2010.

Shares in Chemring, which have climbed seven per cent in the last month, closed down 0.7 per cent at £32.33 yesterday.