Chemring profits soar on strong sales

19th Jan 2010 07:38

Strong demand for military equipment driven by continued conflict in Afghanistan helped the military decoy specialist Chemring post a jump in sales and profits in the year to October 31.Pre-tax profits climbed to £95.8m from £57.7m. Sales climbed to £503.9m from £354.2m. The Energetics division saw sales climb to £320.4m from £196.7m, including £45.6m from acquisitions. Countermeasures sales climbed to £183.5m from £157.5m. Chemring said it expects that forces will be required in Afghanistan 'for many years to come.' It said that while US and UK defence budgets appear to be under threat 'the majority of our niche markets will be unaffected and our strategy for growth remains unchanged.''The group's success over the last decade has been achieved through a clearly defined policy of organic growth, a focused programme of acquisitions, well-executed post-acquisition integration, and subsequent investment in product and facilities to deliver further expansion,' said chairman Ken Scobie. 'The board believes that there is ample opportunity to continue this policy in Europe, the USA and other countries around the world, where joint ventures or new start-ups could be the preferred option.'Underlining the acquisition part of its strategy, Chemring announced that it had agreed to acquire The Allied Defense Group, a US maker of ammunition and provider of load, pack and procurement services for the US government. It said the acquisition of the firm which has a strong Middle Eastern presence, would complement Chemring's current emphasis on NATO customers.