Chemring Group PLC Preliminary Results

22 Jan 2008

• Revenue from continuing operations up 36% to £254.7 million (2006: £187.7 million)
• Underlying profit before tax from continuing operations* up 64% to £53.2 million (2006: £32.5 million)
• Profit before tax from continuing operations up 57% to £49.8 million (2006: £31.8 million)
• Record current order book of £401 million, up 35% since the end of October 2007; year end order book up 39% at £297 million (2006: £214 million)
• Operating cash flow up 33% to £60.6 million (2006: £45.6 million), representing 99% conversion from underlying operating profit* of £61.2 million (2006: £38.5 million)
• Underlying earnings per share from continuing operations* up 56% at 112p (2006: 72p)
• Basic earnings per share from continuing operations up 50% at 105p (2006: 70p)
• Dividend per ordinary share up 56% at 25.0p (2006: 16.0p)

DIVISIONAL HIGHLIGHTS

Both Countermeasures and Energetics performed strongly and achieved record years.

• COUNTERMEASURES
  • Record levels of revenue and volumes of decoys produced
  • Chemring Countermeasures increased revenue 40% to a record £31 million
  • Alloy Surfaces opened a third facility and revenue grew over 14%
    
    
• ENERGETICS
  • Revenue of £128 million, 85% up on 2006
  • Revenue ahead of Countermeasures for the first time
  • Order book at all time high of £177 million
  • All recent acquisitions contributing well in profit and cash terms
  • Simmel Difesa exceeded all budget targets

* Excludes intangible amortisation from business combinations of £3.4 million (2006: £0.7 million)

Ken Scobie, Chemring Group Chairman, commented:

"The Board remains committed to delivering total shareholder value, through the generation of strong after tax profits and a progressive dividend policy. Our strategy has already proved very successful, with over 50% earnings and dividend growth in both of the last two years. The Board believes it can continue with this strategy and produce further above average growth. Next year we expect to see continuing growth in our Countermeasures business, and the ongoing development of Energetics, as this division starts to realise its full potential. We believe the Group is ideally placed to participate in the consolidation of this fragmented energetics industry. We look forward to the 2008 financial year and are confident that it will be another year of strong performance."

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