Chemring impervious to defence review
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The defence contractor Chemring today (17 October) announced that its order book was more than 40% up on last year adding that the implications of the recently published UK Strategic Defence and Security Review on its business would be broadly neutral.
The removal of the RAF Harrier fleet in 2011 will reduce Chemring's countermeasures revenues by about £1 million a year. However, the additional 12 Chinook helicopters to be deployed will increase the support helicopter fleet and potentially increase demand for expendable decoys, particularly in support of the Afghanistan campaign. In the longer term, Chemring said the demand for flares to support the 22 new A400m transport aircraft should outweigh the reduction associated with the withdrawal of C130 aircraft. The reduction in numbers of Joint Strike Fighter aircraft or its delayed timing will have a negligible impact on the decoy production that continues to be dominated by US requirements.
In a market update, the company reported that it had performed strongly in the last quarter of the financial year with revenue in the period increasing substantially to £218 million, up 42% from £154 million in the same period last year. The total revenue generated in the full year was £597 million, 18% higher than the previous year, and represented "a satisfactory rate of growth in spite of the difficult European market conditions".
