Chemring Group PLC (LON:CHG) shares advanced strongly in Tuesday morning’s deals after telling investors that it expects fully year profits for 2020 to be at the upper end of analyst forecasts.
The defence engineer noted that the range of analyst consensus for operating profit is seen at £47mln to £53mln.
It said that trading has progressed as planned despite the challenging environment.
Order intake was up 4% up to August 31 versus the same period last year with the order book standing at £452mln, and, Chemring said that it has “full visibility” for the remainder of the financial year, based on the current delivery schedule.
At the same time, it said that order cover for the 2021 financial year is building and noted that its Countermeasures & Energetics business has so far achieved 82% order cover and Sensors & Information sector has 47% cover.
"This has been a busy period in which the resilience of the group has been demonstrated as we continue to make good progress despite the challenges presented by COVID-19. Our expectations for FY20 are towards the upper end of current analyst expectations,” said Michael Ord, Chemring chief executive.
"We have good momentum as we near the end of FY20 and move into FY21 and, despite the near-term uncertainty that COVID-19 presents, I remain confident that our leading technologies, deep long-term customer relationships and sole-source or market-leading positions mean Chemring's long-term prospects remain strong."
Chemring noted that it continues to be funded by operating cash conversion, and, the company expect to maintain this and its net debt level (£59mln at the end of August).
In London, Chemring shares gained 13.5p or 5.38% to change hands at 264.5p.