US budget cuts hit defence giant's sales
DEFENCE group Chemring put the blame on US military budget uncertainty for lower sales but investors applauded plans to offload non-key businesses.
Chemring, which has issued three profit warnings as defence budget cuts hit its business, said revenue in the three months to October 31 dropped 24 per cent to £185million from a year ago.
Its order book at the end of last month was 8 per cent lower than a year ago at £702million, which it said reflected the US budget pressure and order delays from non-Nato customers. Broker Investec said its energetic sub-systems arm, pyrotechnics and munitions were less critical to long-term success and could go.
Chief executive Mark Papworth said: “Defence remains challenging but we continue to take the necessary steps to give Chemring a stable platform.”
Shares in the company, which makes anti-aircraft decoys, sensors and flares, rose 18½p to 213p.