Shares plummet as Chemring profit takes hit from US shutdown and Middle East tension

Aerospace defence group Chemring has announced a rather gloomy trading update for the third quarter, saying its profit is being dealt a blow from the US shutdown and tensions in the Middle East. (Release)

2013's anticipated operating profit the company says, going to be affected by the closure of a large number of government departments (including the Defense Contract Management Agency and the US Department of Defense) to the tune of around £8m. At present consensus estimates suggest that Chemring's profit will be in the region of £80m.

Chemring isn't yet sure what the impact of shutdown will be, but says it will impact orders and deliveries for the remaining few weeks of the financial year.

The group's shipping to and from the Middle East has been repressed by recent tensions which, it says, will have a short term effect when it comes to some munitions contracts.

Chemring stresses, however, that it continues to manage cash and capital closely. In June, the company began a planning process to shed light on operating strategy and this is now running alongside a detailed budgeting exercise for 2014. Initial findings from this will be given in a post close trading statement, expected in November.