September 29, 2016 / 10:39 AM / 3 years ago

Chemring signs A$18 million Australian defence contract

(Reuters) - British defence contractor Chemring Group Plc (CHG.L), which has been struggling with defence budget cuts in its key markets, said on Thursday that it had signed an Australian contract for A$18 million (£10.61 million).

The deal, with the Australian Department of Defence, is to supply Chemring’s Resolve 3 portable electronic surveillance systems, the company said.

“This is the largest award that the group has received for the Resolve system, growing Resolve’s user-base to nine countries...” CEO Michael Flowers said.

Chemring, which also makes ejector seats for fighter jets and flares used to counter heat-seeking missiles, has lost over a quarter of its value in the last 12 months as it struggled in Middle Eastern economies, which have taken a hit from the slump in oil prices.

The company secured an ammunition contract in the Middle East in April after several delays that had forced it to warn on profit last year.

Shares in the Romsey, Hampshire-based company, which was worth more than 1 billion pounds at its peak, were up 5.65 percent at 144.75 pence at 1017 GMT on the London Stock Exchange.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Sunil Nair

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