Revenue inches up as Chemring eyes good 2013

BELEAGUERED Chemring yesterday moved to put a difficult 2012 behind it as it said revenue in the first three months of the year edged up.

In an interim management statement, the defence services firm said that revenue from continuing operations over the three months from November was £136.1m, up from £132.4m in the prior year.

Stronger trading from its pyrotechnics and counter-IED divisions – revenue jumped 110 per cent and 33 per cent respectively – were offset by weaker performances in countermeasures and munitions, FTSE 250 listed Chemring said yesterday.

Revenue from the countermeasures business, which makes threat weapon systems, was 30 per cent below the same period last year, as a result of a lower opening order book and production delays.

The munitions business saw revenue fall by more than a fifth year-on-year, as it continued to be impacted by delays in the placing of major contracts.

This year looks set to be a better year for the defence services group, as Chemring said it would remain focused on “driving improvements in its operational performance and restructuring its businesses in order to provide the group with greater resilience”, despite the fact that “budget uncertainties continue to impact wider market confidence across the group’s US, UK and European defence markets”.

Last year was a torrid year for Chemring.

Late last year, US private equity house Carlyle Group dropped its bid for the defence firm after months of negotiations, after it issued two profit warnings, hurt by contract delays and technical issues.

Chemring also replaced former chief executive David Price with Mark Papworth, to try to turnaround the company’s fortunes.

Shares closed up 0.82 per cent yesterday at 282.6p, as investors were cheered by the trading update.