QuickView: Biting the bullet
Chemring has announced another profit warning, but unlike previously, management appears to be finally setting about rebasing the company for the future. While FY16 expectations look relatively intact, with 75% order book cover for revenues, a standby rights issue should see debt reduce to manageable levels, enabling management to stop looking over its shoulder and focus on the path ahead. Such repositioning should come as a welcome relief to investors.Chemring Group has three operating segments: Countermeasures, which develops and manufactures expendable countermeasures for air, sea and land platforms, and land-based electronic warfare equipment; Sensors, which develops and manufactures improvised explosive device (IED) detection equipment, chemical and biological threat detection equipment, IED electronic countermeasures, network protection technologies and explosive ordnance disposal equipment; and Energetics, which develops, procures and manufactures signals and illumination devices and payloads, cartridge/propellant actuated devices, pyrotechnic devices, missile and ammunition components, actuators and energetic materials.
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