Broker snap: Chemring results lower than expected, says finnCap

24th Jan 2012 11:37

FinnCap has maintained its hold rating and 480p target price for military equipment maker Chemring following the firm's full-year results which the broker says were accompanied with a "fairly lacklustre outlook statement regarding NATO spending".Underlying profit before tax was up 6% to £125.6m in the year to the end of October. Revenues were up 25% to £745.3m compared to the year before, allowing the firm to also hike its total year dividend 25% to 14.8p. Nevertheless, finnCap says that the results were somewhat lower than its forecasts and also lower than the market's estimates.Chemring's Chairman Peter Hickson said today: "the continuing problems of the Eurozone and the impact of possible sequestration in the US indicate that our traditional markets will not be any easier this year.""The shares have bounced by around 17% over the last months off low levels and it is likely these results will cause some weakness," predicted analyst David Buxton this morning. It seems as if he was right, with shares tumbling by 13% in mid-morning trade to around 391p.While Buxton did acknowledge that these results were lower than expected, he does "appreciate the improving dividend outlook".BC