Defence contractor Chemring Group PLC (LON:CHG) has seen its plans for changes to directors pay shot-down ahead of today’s Annual General Meeting, withdrawing the proposals following consultations with shareholders.
Chemring’s chairman Carl-Peter Forster said: "We have been actively engaging with shareholders regarding long-term incentives for some time and, while we received majority support for the proposed revised approach, the Board believes that the right course of action now is to withdraw the resolutions and consider these plans further.”
In a separate trading update, the small cap company said it had “started the year positively, continuing the momentum of the second half of last year.”
Chemring added that order intake in the first four months of its year was in line with its expectations at £127.4mln, up from £88.9mln at the same stage a year earlier.
But its order book as at February 26 had fallen to £556.9mln, down from £592.9m as at October 31 2016 and £596.3mln a year earlier, reflecting the “investment in working capital required to fund the execution of contracts in the Energetics division.”
And net debt had increased to £146.4mln, up from £87.6mln as at October 31 and from £141.4mln a year earlier also reflecting the investment in working capital.
The group said its expectations for the full year remain unchanged.
It added: “As expected, the seasonality of the business and customer requirements will mean that trading performance and cashflows will be weighted to the second half, but this is expected to be less pronounced than in the prior year.”
In early trading, Chemring shares were up 0.8%, or 1.5p at 199.5p.
In a note to clients, analysts at Liberum Capital said “the recovery appears on track, the H2 bias is to be less pronounced and longer term prospects remain attractive.”
They reiterated a ‘buy’ rating on Chemring and raised their share price target to 210p from 192p.
-- Adds share price, broker comment --