|
|
As reported
|
At 2022 exchange rates
|
|
|
|
2023
|
Change
|
2023
|
Change
|
2022
|
|
Continuing operations
|
|
|
|
|
|
|
Order intake (£m)
|
756.4
|
+37%
|
772.7
|
+40%
|
551.5
|
|
Revenue (£m)
|
472.6
|
+18%
|
477.7
|
+19%
|
401.0
|
|
Underlying EBITDA* (£m)
|
88.5
|
+14%
|
91.2
|
+18%
|
77.3
|
|
Underlying operating profit* (£m)
|
69.2
|
+16%
|
71.7
|
+21%
|
59.4
|
|
Underlying profit before tax* (£m)
|
67.9
|
+17%
|
71.7
|
+24%
|
57.9
|
|
Underlying diluted earnings per share* (pence)
|
20.0
|
+8%
|
20.7
|
+12%
|
18.5
|
|
Statutory operating profit (£m)
|
45.4
|
-8%
|
|
|
49.4
|
|
Dividend per share (pence)
|
6.9
|
+21%
|
|
|
5.7
|
|
Net debt at 31 October (£m)
|
14.4
|
+100%
|
14.1
|
+96%
|
7.2
|
|
Order book at 31 October (£m)
|
921.6
|
+42%
|
964.5
|
+48%
|
650.9
|
Key achievements
- 2023 was slightly ahead of the Board’s initial expectations despite foreign exchange headwinds
- Record order intake of £756m, with growth across both segments:
- Order intake for Countermeasures & Energetics was £541m, up 52%, driven by strong demand at our niche Energetics businesses where order intake was up 161%
- Order intake for Sensors & Information was £215m, up 10%, with Roke continuing to execute its growth strategy
- Closing order book at the highest level in over a decade at £922m
- Roke revenue was up 45% to £160m and order intake up 9% to £183m with the business well positioned to continue its growth trajectory in what continues to be a buoyant market
- Net debt was £14.4m (2022: £7.2m), with strong operating cash generation and cash conversion of 101% on a rolling 36 month basis (2022: 108%). Net debt to underlying EBITDA was 0.16 times (2022: 0.09 times)
- £120m capacity expansion plan to 2026 initiated to capitalise on growing demand in the energetics market, delivering expected incremental revenue of £85m per annum from 2026/27
- £9m deployed in Q4 into the £50m share buyback programme announced on 1 August 2023
- A buy-in contract was entered into with an insurer in respect of the Group’s defined benefit pension scheme on 28 November 2023, which will remove future risk associated with funding of the scheme
- Proposed final dividend per share of 4.6p, up 21%, giving a total dividend of 6.9p (2.9 times cover)
- The Board’s expectations for 2024 are unchanged. Approximately 79% (2022: 86%) of expected 2024 revenue is covered by the order book, with unprecedented cover in Countermeasures & Energetics for 2025 and 2026 at 71% and 65% respectively of expected revenue.
Michael Ord, Group Chief Executive, commented:
“2023 was another year of strong Group performance; and in an environment of increasing global uncertainty demand continues to grow for our mission-critical products and services. With record order intake and an order book at the highest level in over a decade the Group is well placed for continued delivery of sustainable performance and growth.
Trading since the start of the current financial year has been in-line with plans, and with 79% of expected revenue covered by the order book the Board’s expectations for 2024 performance are unchanged.
The outlook for global defence markets is increasingly robust, with continued growth expected over the next decade. This growing visibility gives us the confidence to continue to invest for the future, balancing near-term performance with longer-term growth and value creation.
Chemring is well placed to deliver on its many opportunities.”
Notes:
* All profit and earnings per share figures in this news release relate to underlying business performance (as defined below) from continuing operations unless otherwise stated. See note 4 for a reconciliation of the reported comparative values to the comparative values that have been re-presented on the basis of the classification of operations as discontinued.
The principal alternative performance measures (“APMs”) presented are the underlying measures of earnings which exclude: exceptional items, gain or loss on the movement on the fair value of derivative financial instruments, the amortisation of acquired intangibles and the associated tax impact on these items. The Directors believe that these APMs assist with the comparability of information between reporting periods as well as reflect the key performance indicators used within the business to measure performance. The term underlying is not defined under IFRS and may not be comparable with similarly titled measures used by other companies.
A reconciliation of underlying measures to statutory measures is provided below:
|
Group – continuing operations:
|
Underlying
|
Non-underlying
|
Statutory
|
|
EBITDA (£m)
|
88.5
|
(20.8)
|
67.7
|
|
Operating profit (£m)
|
69.2
|
(23.8)
|
45.4
|
|
Profit before tax (£m)
|
67.9
|
(23.8)
|
44.1
|
|
Tax charge (£m)
|
(10.2)
|
3.8
|
(6.4)
|
|
Profit after tax (£m)
|
57.7
|
(20.0)
|
37.7
|
|
Basic earnings per share (pence)
|
20.5p
|
(7.1)
|
13.4
|
|
Diluted earnings per share (pence)
|
20.0p
|
(6.9)
|
13.1
|
|
Group – discontinued operations:
|
|
|
|
|
Loss after tax (£m)
|
(0.9)
|
(31.4)
|
(32.3)
|
|
Segments – continuing operations:
|
|
|
|
|
Sensors & Information EBITDA (£m)
|
38.5
|
(22.2)
|
16.3
|
|
Sensors & Information operating profit (£m)
|
34.2
|
(23.5)
|
10.7
|
|
Countermeasures & Energetics EBITDA (£m)
|
65.5
|
-
|
65.5
|
|
Countermeasures & Energetics operating profit (£m)
|
50.5
|
(1.7)
|
48.8
|
The adjustments comprise:
- amortisation of acquired intangibles of £3.0m (2022: £3.9m)
- costs relating to acquisitions of £3.7m (2022: £2.0m)
- impairment of Chemical Detection assets £18.5m (2022: £nil)
- gain on the movement in the fair value of derivative financial instruments of £1.4m (2022: £4.1m loss)
- tax impact of the adjustments above: £3.8m credit (2022: £1.1m credit); and
- discontinued operations in respect of the explosive hazard detection (“EHD”) business in Sensors & Information, net of tax, of £31.4m (2022: £0.5m) which includes an impairment of goodwill and other assets.
Further details are provided in note 3.
EBITDA is defined as profit before interest, tax, depreciation and amortisation. Reference to constant currency relates to the re-translation of 2023 financial information at the 2022 exchange rates to reflect the movement excluding the impact of foreign exchange. The exchange rates applied are disclosed in note 10.
For further information:
| Rupert Pittman |
Group Director of Corporate Affairs, Chemring Group PLC |
01794 463401 |
James McFarlane
|
MHP |
07584 142665 |
Ollie Hoare
|
|
07817 458804 |
Cautionary statement
This announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Chemring's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are: increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approvals for engineering or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects. Chemring undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.
Notes to editors
- Chemring is a global business that specialises in the manufacture of high technology products and the provision of services to the aerospace, defence and security markets
- Employing approximately 2,600 people worldwide, and with production facilities in four countries, Chemring meets the needs of customers in more than fifty countries
- Chemring is organised under two strategic product segments: Sensors & Information and Countermeasures & Energetics
- Chemring has a diverse portfolio of products that deliver high reliability solutions to protect people, platforms, missions and information against constantly changing threats
- Operating in niche markets and with strong investment in research and development (“R&D”), Chemring has the agility to rapidly react to urgent customer needs
www.chemring.com
Presentation
A video presentation and accompanying slides will be available at the Chemring Group results centre www.chemring.com/investors/results-centre at 07.00 (UK time) on Tuesday 12 December 2023.
Analyst meeting
An analyst meeting will take place at 09.00 (UK time) on Tuesday 12 December 2023 at the offices of Investec Bank plc, 30 Gresham St, London EC2V 7QP. To confirm attendance please contact MHP: [email protected] /+44 (0)7711 191518.
Photography
Original high resolution photography is available to the media by contacting Catherine Chapman, MHP Communications: [email protected] / tel: +44 (0)7711 191518.
View the full press release in PDF format.