Jan 24 Military equipment maker Chemring Plc
reported a 42 percent fall in profit in fiscal 2012, a
year marred by profit warnings and failed takeover talks, and
said difficult market conditions would persist in 2013.
The British company, which makes defence equipment such as
flares and explosive device detectors, said pretax profit on an
underlying basis fell to 70.1 million pounds ($111.05 million)
in the year ended Oct. 31, from 120.2 million pounds a year
Revenue rose 2 percent to 740.3 million pounds.
The company more than halved its final dividend to 4.2 pence
Chemring issued two profit warnings between August and
November due to contract delays and technical problems,
affecting takeover talks with private equity firm Carlyle Group
and leading to the ouster of Chief Executive David Price.
He was replaced by Mark Papworth, credited with leading a
turnaround at oil industry services company John Wood Group
In Chemring's first results statement since Papworth took
over, the company said it would simplify the management
structure, integrate operating units and prioritise cash and
Chemring said a lack of clarity over defence budget cuts in
the United States was likely to erode market confidence and
delay purchase decisions and that defence spending in the United
Kingdom and Europe would also remain under pressure.
The threat of across-the-board cuts to the U.S. defence
budget is weighing on Chemring and its peers. Earlier this
month, U.S. Defence Secretary Leon Panetta acknowledged for the
first time that the cuts were increasingly possible.
Chemring shares closed at 282.5 pence on the London Stock
Exchange on Wednesday. They shed 43 percent of their value last