Updating the market on third quarter trading, recently installed chief executive Michael Flowers said: “Our order book is strong, the intake is stable. From our limited perspective, our part of the market is stabilising. We’re seeing growing demand in Asia Pacific, though it’s not that big when compared with the US, NATO.
Chemring is not gearing up to increase production, Mr Flowers insisted, but added if there was “a requirement from governments, we would be in a position to support that requirement, adding a shift or weekend working”.
Revenues for the three months to July 31 were £77.5m, down from £110.5m in the same period last year, but Mr Flowers said was down to timing of contracts and production. At £417.5m, the order book was 3.9pc stronger than in the previous quarter.
The company also secured some strategic US contracts over the quarter, Mr Flowers said, including developing a new ground-penetrating radar for the US military, and will also take part in three research and development programmes for chemical detectors.
Chemring is also improving its financial position, using the £134.5m it received from selling its European munitions business to pay down debt.
Liberum analysts welcomed the company reducing its debt and noted that the shares have been rising as conflict in the Middle East intensifies, adding “escalation of strikes against ISIS could boost countermeasure volumes”.
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