20 Mar 2008
Chemring Group PLC ("Chemring" or "the Group") is to hold its
Annual General Meeting at 2.30pm today. The Chairman, Ken Scobie,
will make the following statement:
"The previous financial year was one of strong growth across all
our businesses and I am delighted to report that the Group
continues to perform well. Trading in both our Countermeasures and
Energetic divisions, during the first part of 2008, has been in
line with our expectations. The Group's order book has
increased to a record £420 million, about 63% higher than at
this time last year.
In the Countermeasures division, we were delighted that Kilgore
Flares Company LLC ("Kilgore") won the competition to supply the
M212 flare to the US Department of Defense. The M212 flare is a key
component in the flare suite used by the US Army and US Air Force
to protect helicopters from infra-red ("IR") guided missiles.
Chemring now manufactures all three flare components of this
advanced IR countermeasure suite ("AIRCMM"). The five year IDIQ
(Indefinite Delivery, Indefinite Quantity) contract has a maximum
value of $382.9 million and is the largest framework contract ever
placed with the Group by the US Government. A first delivery order
for 200,500 flares at a value of approximately $14.9 million, for
delivery in the second half of 2009, has just been awarded, and is
included in the order book of £420 million referred to
above.
I am also delighted to announce that the US Department of
Defense has just awarded Kilgore a $20 million contract for the
annual buy of M206 (another of the AIRCMM components), MJU-7 (F-16)
and MJU-10 (F-15) flares for delivery in 2008 and 2009.
Alloy Surfaces Company, Inc. is also negotiating a five year
IDIQ contract with the US Department of Defense for the special
material decoy component of the helicopter flare suite. Although
negotiations have been protracted, we are confident that the new
contract will be announced shortly.
Demand from NATO countries for conventional and spectral IR
decoys remains strong and our UK countermeasures facility continues
to operate at maximum capacity. There has also been a significant
increase in the demand for naval countermeasures, and two NATO
countries have recently placed orders for both IR and radio
frequency ("RF") technology variants.
The Energetics businesses are also performing well. Over
£120 million of new orders have been received in the first
four months of this financial year, almost treble that of last
year. Simmel Difesa SpA, in particular, has made a strong start to
the year, having recently restarted production of the 81mm
white-light illumination round. The first batch of new product has
been delivered, and a multi-year order for the supply of 140,000
white-light and 50,000 black-light illumination rounds has been
received.
I am also pleased to announce that the Group has successfully
completed the acquisition of Titan Dynamic Systems, Inc. ("Titan")
for a cash consideration of $4.75 million, having received the
necessary regulatory approvals. Titan, based in Marshall, Texas,
USA, is a leading manufacturer of battlefield effects simulators,
which are incorporated into the US Army's and Marine
Corps' digital training ranges. The acquisition of Titan is
an important step towards consolidating our leading position in the
battlefield effects simulation market, particularly in the USA.
In November 2007, the Group completed a $150 million private
placement of ten year fixed interest loan notes in the USA with a
number of institutional investors. The proceeds from the loan
notes, which carry an interest rate of approximately 6.30%, were
used to repay short term dollar debt and have provided the Group
with additional working capital facilities. The strengthening of
our balance sheet gives us greater flexibility as we continue to
pursue our growth strategy.
The Board remains confident that the prospects for growth in
2008 continue to be excellent."
For further information:
| Ken Scobie |
Chairman, Chemring Group PLC |
01489 881880 |
| Dr David Price |
Chief Executive, Chemring Group
PLC |
01489 881880 |
| Rupert Pittman |
Cardew Group |
0207 930
0777 |