Highlights
Overall interim results in line with expectations. Full year outlook remains broadly unchanged before the effect of further foreign exchange headwind in the second half
Strong margins in Sensors & Electronics and good operational progress in Energetic Sub-Systems mitigates ongoing issues in US Countermeasures business
Significant reduction in net debt to £229.2 million at period end (2013: £275.1 million) before receipt of disposal proceeds, reflecting inherent cash generative nature of the business
Completed small but significant acquisition of 3d-Radar, which consolidates Chemring's leading international position in ground penetrating radar
Divestment of European Munitions Business
Strategic disposal completed on 27 May 2014, £134.5 million (€165.3 million) proceeds received
Chemring is now a focused defence technology business with well-established core competencies and world-leading positions in Countermeasures, Sensors & Electronics and Energetic Systems
Whilst dilutive to earnings, the divestment significantly strengthens Chemring's balance sheet, creating greater flexibility to pursue growth opportunities in chosen markets
Concludes the disposal process that resulted from the 2013 strategic review
Appointment of Group Chief Executive
A separate announcement has been made today regarding the appointment of Michael Flowers as Group Chief Executive with immediate effect
Peter Hickson, Chairman of Chemring, commented:
"The Group has made important progress in the period, re-focusing its operations and strengthening the balance sheet to create greater flexibility to invest for growth. The divestment of the European munitions business was a key milestone for Chemring and concludes the disposal processes stemming from the 2013 strategic review.
As a result, we are now moving to a position where we can take advantage of the stronger platform that has been created. The appointment of Michael Flowers, with his proven track record, both within the international defence industry and within Chemring, places us in a strong position to build on our world leading technologies and market positions in Countermeasures, Sensors & Electronics and Energetic Systems.
While end markets remain challenging and customer behaviour difficult to predict, we will continue to drive operational efficiencies. We are also pursuing growth opportunities, particularly in non-NATO and commercial markets. Excluding the effects of further movements in exchange rates, the Board's outlook for the full year remains broadly unchanged."
