Echo Business

Defence firm’s shares plummet

6:50am Wednesday 25th January 2012

HAMPSHIRE defence firm Chemring saw its shares tumble 14 per cent after warning further economic turbulence in Europe could accelerate defence budget cuts.

The Fareham based firm saw shares fall 62.5p to 386.5p yesterday despite reporting an increase in revenues for the year to October 31 increase 25 per cent to £745.3m. Underlying pre-tax profits rose 6 per cent to £125.6m as sales to non-Nato market grew.

Chemring Group Chairman Peter Hickson said Goverments were struggling with deficits and lower economic growth which had cut and delayed defence spending.

“The continuing problems of the Eurozone and the impact of possible sequestration in the US indicate that our traditional markets will not be any easier this year,” he warned.

“We continue to pursue our policy of reducing our dependence on these markets, and are actively seeking more business from elsewhere.”

He said Chemring’s order book stood at £980m, up 12 per cent since the year end, with 44 per cent of orders coming from non-NATO markets, compared to a third last year.

Mr Hickson added: “We see further good growth prospects in these markets and will pursue the opportunities they offer.” He added the firm had the products and the skills to achieve its objectives.

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