03 Aug 2004

Chemring Group PLC (“Chemring”) announces that it has reached a settlement with Royal & SunAlliance (“R&SA”) in respect of the insurance claim for property damage and business interruption at the site of its Tennessee-based countermeasures business, Kilgore Flares Company LLC (“Kilgore”), following an incident in April 2001. R&SA has agreed to make a further payment of US$9.0 million to Chemring. This brings the total settlement paid by R&SA to US$17.0 million.

Chemring is now pursuing a claim against its insurance brokers, Willis, concerning the insurance cover for Kilgore and their subsequent handling of the claim.

David Evans, Chief Executive of Chemring, said: “We are pleased to have finally reached an acceptable settlement with R&SA. The receipt of US$9.0 million will be used to reduce the Group’s net debt. We believe the outstanding balance of US$4.5 million, not covered by the R&SA settlement, will be recovered in due course from Willis”.

For further information:

David Evans Chief Executive
Chemring Group PLC
01489 881880

Jonathan Rooper
CardewChancery
0207 930 0777