Full Year Results 2022 13 Dec 2022
As reported At 2021 exchange rates
2022Change 2022 Change 2021
Order intake (£m) 551.5 +28% 523.1 +21% 431.0
Revenue (£m) 442.8 +13% 421.2 +7% 393.3
Underlying EBITDA* (£m) 82.3 +8% 79.9 +5% 76.4
Underlying operating profit* (£m) 64.0 +11% 62.2 +8% 57.5
Underlying profit before tax* (£m) 62.5 +12% 60.8 +9% 55.9
Underlying basic earnings per share* (pence) 20.2 +20% 19.7 +17% 16.9
Statutory operating profit (£m) 53.3 +6% 50.4
Dividend per share (pence) 5.7 +19% 4.8
Net debt at 31 October (£m) 7.2 -73% 3.9 -85% 26.6
Order book at 31 October (£m) 650.9 +30% 604.1 +21% 500.8

Highlights

  • FY22 performance exceeded the Board's initial expectations with strong performance in both sectors despite a challenging macro-economic environment.
  • Roke revenue exceeded £100m for the first time and with order intake of £168m, up 59%, is well positioned to continue its growth trajectory in what continues to be a buoyant market
  • Post year-end acquisition of Geollect completed on 7 December 2022
  • Order intake for Countermeasures & Energetics was £356m, up 40%, driven by multi-year orders received across the sector
  • Investment in the Group's manufacturing infrastructure continues to be a key enabler to deliver improved safety and operational excellence, with the Countermeasures & Energetics margin improving from 16.2% to 17.4%
  • The continued reduction in net debt by 73% to £7.2m was driven by strong operating cash generation and cash conversion of 109%. Net debt to underlying EBITDA of 0.1 times
  • Proposed final dividend increased by 19% to 3.8p, giving a total dividend of 5.7p (3.5 times cover)
  • Board's expectations for FY23 are unchanged. Approximately 86% (2021: 84%) of expected FY23 revenue is covered by the order book

Michael Ord, Group Chief Executive, commented:

"This has been another year of positive performance and growth across the Group, exceeding the Board's initial expectations despite a challenging macro-economic environment. I am delighted with the financial and operational progress that continues to be made across the Group as we build a stronger, higher quality and technology focused business.

"Our purpose at Chemring is to deliver innovative technologies and products that detect and defeat ever-changing threats and help make the world a safer place. This has never been as important as it is today given the fast changing geopolitical and technological backdrop. Our relentless focus on living our shared values of Safety, Excellence and Innovation is what powers this and I would like to thank all my colleagues across Chemring for their determination, hard work and support. Our continued progress would not be possible without their collective efforts.

"Trading since the start of the current financial year has been in line with expectations. With 86% of FY23 expected revenue covered by the order book, the Board's expectations for FY23 performance are unchanged. Chemring is well placed, with a robust strategy, market-leading positions across different geographies and sectors, and with products and services that are critical to our government and blue-chip customers around the world. Chemring's long-term prospects remain strong."

Notes:

* All profit and earnings per share figures in this news release relate to underlying business performance (as defined below) unless otherwise stated.

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 improve 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 : Underlying Non-underlying Statutory
EBITDA (£m) 82.3 (6.1) 76.2
Operating profit (£m) 64.0 (10.7) 53.3
Profit before tax (£m) 62.5 (10.7) 51.8
Tax charge (£m) (5.7) 1.3 (4.4)
Profit after tax (£m) 56.8 (9.4) 47.4
Basic earnings per share (pence) 20.2 (3.3) 16.9
Diluted earnings per share (pence) 19.7 (3.3) 16.4
Segments:
Sensors & Information EBITDA (£m) 33.0 (1.2) 31.8
Sensors & Information operating profit (£m) 30.0 (3.7)
 26.3
Countermeasures & Energetics EBITDA (£m) 64.2 - 64.2
Countermeasures & Energetics operating profit (£m) 48.9 (2.1) 46.8

The adjustments to continuing operations comprise:

  • amortisation of acquired intangibles of £4.6m (2021: £6.2m)
  • costs relating to acquisitions of £2.0m (2021: £1.6m)
  • loss on the movement in the fair value of derivative financial instruments of £4.1m (2021: £0.7m gain)
  • tax impact of adjustments of £1.3m credit (2021: £1.0m credit)

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 2022 financial information at the 2021 exchange rates to reflect the movement excluding the impact of foreign exchange. The exchange rates applied are disclosed in note 9.

For further information:

Rupert Pittman Group Director of Corporate Affairs, Chemring Group PLC 01794 463401
Oliver Hughes
 MHP 020 3128 8276

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 2,300 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 13 December 2022.

Analyst meeting
An analyst meeting will take place at 08.30 (UK time) on Tuesday 13 December 2022 at the offices of Investec Bank plc, 30 Gresham St, London EC2V 7QP. To confirm attendance please contact MHP Communications: chemringplc@mhpgroup.com / +44 (0) 20 3128 8339.

Photography
Original high resolution photography is available to the media by contacting Catherine Chapman, MHP Communications: catherine.chapman@mhpgroup.com / tel: +44 (0) 20 3128 8339.

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Chemring Group plc published this content on 13 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 December 2022 07:04:02 UTC.