- Advertisement -

Chemring posts 20% rise in revenue

Chemring shares were over 10% up on Tuesday after the group posted strong results for the year ended 31 October.

The aerospace and defence company posted a 20% increase in revenues to £402.5m and a 31% growth in underlying profit before tax to £51.7m.

Chemring lifted its dividend and cut net debt thanks to good progress made on securing new business in the UK.

Michael Ord, Group Chief Executive, commented: “Our focus in recent years has been on putting in place the foundations on which to build a stronger, higher quality business. The resilience of the Group in response to the coronavirus pandemic is a consequence of the dedication and commitment of all our people and clearly demonstrates the significant progress that we have made. We set ourselves demanding goals and our teams across the Group have risen to those challenges, delivering a financial performance that was ahead of the Board’s expectations.

“Trading since the start of the current financial year has been in line with expectations. With 78% of 2021 expected revenue covered by the order book, the Board’s expectations for 2021 performance remain unchanged. Chemring is well placed, with a robust strategy, market-leading positions across different geographies and sectors, and with products and services that are critical to our government and blue-chip customers. Chemring’s long-term prospects remain strong,” he added.

Broker Peel Hunt said: “Management has made a lot of headway tidying the business up over the last couple of years – for example, we note this is the second year running with no exceptional charges and operating cash conversion (of EBITDA) above 100%.”

“We think that with the good growth potential from both Roke and Sensors & Information sitting over the solid long-term outlook for Countermeasures, the shares are looking increasing attractive on less than 20x FY22E.”

Chemring shares are trading +9.59% at 297.00 (1335GMT).

Register for our free newsletter

Related Articles