Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Chemring streamlines Energetics business, not to reopen CCM line

Published 15/11/2018, 08:25
© Reuters.  Chemring streamlines Energetics business, not to reopen CCM line
CHG
-

(Reuters) - Defence contractor Chemring Group Plc (L:CHG) said on Thursday it would exit some businesses in its Energetics segment that makes components for explosives as part of a restructuring and that it would not reopen a blast-hit unit at its CCM factory.

The company expects to record a non-cash impairment charge of about 68 million pounds ($88 million) in 2018 against the businesses which it would discontinue and classify as held for sale.

"The future focus within the Energetics segment should be on the niche specialist energetic materials businesses in Chicago, Ardeer and Norway," the company said.

Shares of Chemring, which reported lower full-year revenue, fell 2.7 percent to their lowest since January.

The production line at the CCM factory was affected after an explosion in August that killed an employee.

The segments that Chemring will exit under its Energetics business - which provides components for explosives and other devices - are located in Derby and Florida, it said.

The British contractor, which also makes mechanisms used in ejection seats, has benefitted from increased defence spending by the United States under President Donald Trump.

Chemring reiterated that the countermeasures market continues to recover, primarily driven by the United States.

Total full-year revenue fell to 436 million pounds ($566.10 million) from 547 million pounds a year earlier. Of this, 139 million pounds came from the businesses it is exiting.

The company said excluding the impact of the CCM factory blast this year, trading across the group in the fourth quarter was in line with its expectations.

($1 = 0.7692 pounds)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.