FY15 result in line with revised, lower expectations set out in 26 October 2015 statement
Solid operational recovery across Countermeasures and Energetic Systems segments
Key contract wins on US Sensors & Electronics development programmes for IED, chemical and biological detection
Record year end order book of £569.6 million at 31 October 2015
Expectations for FY16 unchanged
Fully underwritten Rights Issue launched today to raise gross proceeds of £80.8 million to reduce
indebtedness (see separate announcement)
Process underway regarding non-executive Board changes
Michael Flowers, Chemring Group Chief Executive, commented:
"2015 was a disappointing year, with several key export orders in the Sensors & Electronics segment taking longer to materialise than anticipated. In addition, the Energetic Systems segment was heavily impacted in the final quarter of the year by a contract termination and delays to the start of fulfilment of a major order for 40mm ammunition. These events have overshadowed the progress we have made in improving the Group's operations, which have resulted in all of our business units being profitable in FY15. This progress reflects our strong management team and growing collaboration within the Group.
We expect the wider market backdrop for global defence expenditure to be one of slow recovery in 2016. The situation for US defence spending is more stable than it has been for some time, and ongoing geopolitical tensions in the Middle East and elsewhere emphasise the need for robust defence and security measures. The timing of Middle East order placement and contract activity remains difficult to predict, in part due to the impact that recent falls in the oil price are having on Government spending in the region. Nevertheless, our continued customer focus means the Group is well positioned to benefit from any sustained increase in demand in its markets."