Chemring Group PLC - Covid-19 Update
FOR IMMEDIATE RELEASE
Chemring today provides the following update in response to the COVID-19 ("CV-19") global pandemic.
Our priority is the health, safety and well-being of our people, their families, our customers and the communities in which we operate. We continue to focus on risk mitigation and business continuity, and are implementing the latest government and health authority recommendations in each of our home markets.
Our people have risen to the challenge, adapting their working practices to minimise the spread of the virus, whilst continuing to focus on the critical needs of our customers.
In the US, the UK and Norway, Chemring's operations have been designated as critical to the defence and national security industrial base, and in Australia the risk of business interruption is considered to be low. All our businesses remain open, with business continuity plans mobilised at every location. We continue to make every effort to maintain delivery of essential services and manufacturing production in support of our customers.
We are proud of the essential contribution that Chemring makes to the ongoing defence and national security missions of our customers and we are committed to supporting them throughout this crisis.
As disclosed in our trading update on
Our manufacturing businesses continue to work closely with their customer representatives to deliver timely testing and acceptance of products. To date we have worked through some CV-19 related disruptions where customer representatives have not been able to complete product acceptance procedures on a timely basis and going forward this presents a risk of some short term revenue deferrals. Our wide geographic and customer base provides some mitigation to this potential short-term risk.
Financial position and mitigating actions
The Group has committed revolving credit facilities ("RCF") totaling approximately
The financial covenants associated with the RCF are Net debt : EBITDA of less than 3.0x and Net interest cover greater than 4.0x. At the last measurement date of
Given the uncertainty surrounding the length of the CV-19 pandemic, the Group has taken various actions to protect profitability and to conserve cash. Operational expenditure has been reduced and all discretionary spending is tightly controlled as we seek to ensure the Group is well placed to navigate the current challenges. The already established enhanced focus on working capital management, in particular the reduction of intra-period net debt volatility, is proving beneficial and the Group is focusing on ensuring working capital disciplines are maintained in these challenging times.
The Group's FY19 final dividend of 2.4p (
Outlook and guidance
The duration and impact of CV-19 across our home markets is at this stage unknown, and we are clearly working in a changing and more challenging environment. We will continue to work closely with our customers and other stakeholders, and will provide further updates as appropriate.
In the longer term, 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. This, together with the Group's strong balance sheet, gives the Board confidence that despite the near-term uncertainty, Chemring's long-term prospects remain strong.
"These are clearly unprecedented times in which our number one priority is the health, safety and well-being of our people, their families, our customers and the communities in which we operate. All of our businesses remain open reflecting our essential contribution to the defence and national security missions of our customers and we are committed to supporting them throughout this crisis. Whilst we are clearly mindful of market uncertainty due to COVID-19, we continue to see positive momentum across the Group and our improving order book, robust financial position and strategy ensure that our long-term prospects remain strong."
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For further information:
Group Director of Corporate Affairs,
+44 (0)1794 833901
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+44 (0)20 3128 8100
This announcement contains unaudited information based on management accounts and 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 2,500 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: Countermeasures & Energetics, and Sensors & Information
· 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, Chemring has the agility to rapidly react to urgent customer needs
This information is provided by RNS, the news service of the
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