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Chemring's profit falls as defence budget cuts pinch
January 22, 2015 / 7:36 AM / 3 years ago

Chemring's profit falls as defence budget cuts pinch

(Reuters) - British defence contractor Chemring Group Plc (CHG.L) reported a 41 percent fall in underlying pretax profit, hurt by defence budget cuts in its key markets, and said it was yet to see a big increase in demand despite geopolitical tensions in many parts of the world.

Full-year pretax profit on an underlying basis fell to 30.3 million pounds from 51.6 million pounds a year earlier.

Revenue fell to 474.9 million pounds in the year ended Oct. 31, 2014 from 624.9 million pounds a year earlier.

Chemring, whose profit was hit by budgetary cuts in the United States, has been selling its non-core businesses since 2012 and pushing into non-NATO markets.

The company sold its European ammunitions business to France’s state-owned Nexter Systems SA for about 168 million euros in April to focus on its core defence technology business.

“Whilst there has been growth in some markets, notably the Middle East, these regions are still modest in scale when compared to NATO defence spending,” the company said in a results statement on Thursday.

Reporting by Roshni Menon in Bengaluru; Editing by Gopakumar Warrier

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