Chemring trading in line, FY expectations unchanged

Chemring said on Friday that it has kicked off the year on a positive note, with trading in the first four months in line with its expectations.

Order intake came in at £127.4m in the four months to 26 February 2017, compared to £88.9m in the four months to 28 February 2016.

Meanwhile, revenue rose to £145.6m from £106.5m, reflecting the sharp drop in the pound and the fulfilment of contracts in the Energetics Systems division.

The order book stood at £556.9m versus £596.3m, partly due to the weaker dollar against sterling and to a stable operational performance resulting in some order backlog being cleared.

Net debt at 26 February was £146.4m compared to 2016's £141.4m and the company attributed the increase to the investment in working capital required to fund the execution of contracts in the Energetics division, which continue to perform well. Chemring tsaid that assuming an extension of the existing letter of credit is agreed, these are expected to be strong contributors to the 2017 performance.

Chemring said its expectations for trading for the full year remain unchanged.

“As expected, the seasonality of the business and customer requirements will mean that trading performance and cashflows will be weighted to the second half, but this is expected to be less pronounced than in the prior year.”

At 0910 GMT, the shares were flat at 198p.