Following a fatal accident near its site at Salisbury, Chemring (LON: CHG) shares have plummeted 20 percent.
An explosion on Friday led to the death of a 29-year-old man from Southhampton and the serious injury of a 26-year-old from Pewsey.
The weapons maker, who is carrying out an investigation, said: “A full and immediate investigation into the cause of the incident has been launched in co-operation with the local regulatory authorities.”
Following the accident, the company said that the full-year underlying operating profit will be around £10 million to £20 million lower than previous expectations due the halt in productions.
“The impact on our 2018 and 2019 financial years cannot be accurately quantified at this stage as it will be dependent on insurance recoveries, the timeline for the investigation to be completed and the site to re-open, remediation work to be completed and at what rate production resumes,” said Chemring.
The warning sent shares plummeting 23.7 percent in early trade.
“The production of flares in the countermeasures division is inherently risky, due to the highly volatile nature of materials used,” said analysts from Berenberg in a note.
The company is also facing a corruption investigation by the Serious Fraud Office over the use of middlemen in two historic contracts.
Shares in the group are currently trading down 12.08 percent at 207.50 (1657 GMT).
