Defence firm sees its end-of-year profits fall sharply

LOSS Defence company Chemring, which is based in Fareham
LOSS Defence company Chemring, which is based in Fareham
Picture: Isle of Wight Radio/PA Wire

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DEFENCE firm Chemring has reported a total loss of £56.6m for its financial year to the end of October.

The company has its headquarters in Segensworth and manufactures munitions as well as devices to protect ships and aircraft from guided missiles, and to detect improvised explosive devices.

The firm’s operating profit before tax slipped 25.5 per cent compared to the year previously, from £70.1m to £52.4m.

The fall had been anticipated by analysts, and is blamed partly on the US government’s shutdown last autumn when public spending ceased as Congress struggled to agree a budget.

Peter Hickson, Chemring Group chairman, said the firm will be looking to grow its business by dealing with non-Nato contracts, and it will also sell off some of its non-core assets.

That follows a previous sale of its marine flare business, Chemring Marine, to Drew Marine in the summer of 2012.

He said: ‘At the end of a year of significant change, Chemring is now a more resilient business, with a clear strategic direction.

‘Much has been achieved by the new management team during the year, with the positive impact of the performance recovery programme beginning to bear fruit.

‘In addition, the strategic planning process has provided a clear view of the market, competitive dynamics and prospects for each of the businesses, as well as identifying the core markets in which the group will focus investment.

‘Chemring will continue to drive improvements in operational performance, and pursue the growth opportunities that exist, particularly within non-Nato markets where defence spending is expected to increase.

‘It will also reshape and strengthen its portfolio of businesses through the disposal of non-core activities and technology investment in those businesses that can achieve sustainable growth and margin improvement. Meanwhile, the board’s expectations for the current financial year remain unchanged.’