Chemring Group (LSE:CHG) shares fell 5% to 495p after the defence technology group flagged a slower-than-expected start to its financial year, driven by manufacturing problems at a US facility, and warned that rising capital expenditure would push debt higher.
The group's Kilgore Flares plant in Tennessee, which operates a fully automated countermeasures production line, experienced operational difficulties that are now largely resolved.
Chemring said it would wind down legacy operations at the site and consolidate production into the automated facility, triggering a non-cash impairment charge.
First-quarter order intake of £122 million fell sharply against the £393 million recorded a year earlier, though Chemring attributed the gap to an unusually strong prior-year period in which several large multi-year contracts were secured across both divisions.
The order book edged up to £1.364 billion from £1.351 billion, with 85% of full-year revenue now covered, compared with 81% at the equivalent stage last year.
Chemring cautioned that accelerating investment in energetics capacity, funded through existing borrowing facilities, would increase net debt at both the interim and year-end stages.