Chemring sticks to full-year guidance

25th Nov 2013 07:18

- Maintains full-year guidance- Final quarter revenue falls 24 per cent from year agoFTSE 250 defence group Chemring said expectations for the financial year ended October 31st remain in line with previous guidance despite the adverse market backdrop.Revenue in the final quarter was approximately £185m, down 24% from the same period last year while its order book at the end of October was £702m, 8% lower than at the end of the previous financial year."These reductions reflect the significant budgetary pressures in Chemring's core defence markets and order deferrals among the group's non-NATO customer base," the group explained in a company statement.As reported in October, the group said delays in deliveries to customers in the Middle East have had a short-term impact, reducing cash inflow for the final quarter of the financial year.Among its divisions, following the drawdown from Afghanistan, its Countermeasures market contracted dramatically and will not grow significantly until new platforms, it said.Its Sensors & Electronics businesses continue to perform well. Elsewhere demand from NATO customers for its Pyrotechnics & Munitions products has dwindled, however it said it continues to hold strong positions in the markets for naval, light armoured vehicle and tank munitions.In Energetic Sub-Systems margins are expected to recover over time and the order backlog to be reduced.Chief Executive Mark Papworth said: "Although the defence environment remains undeniably challenging, we continue to take the necessary steps to give Chemring a stable platform and rebuild shareholder value. These steps will be driven by the results of our strategic planning process that has crystallised our long-term objectives for the business, determined our strategy for the next three years and enabled a re-alignment of our portfolio."Net debt was reduced by more than £45m in the quarter to £249m on October 31st.CJ