June 3, 2020 / 6:37 AM / a month ago

Chemring backs annual outlook as half-year profit jumps on new orders

(Reuters) - British defence contractor Chemring Group (CHG.L) on Wednesday stood by its annual targets and posted a jump in half-year profit, as it won new orders from the United States despite the coronavirus crisis.

Chemring said its order book was strong and about 95% of the expected revenue for the second-half of the year has been delivered to date, after its underlying profit before tax rose to 24.2 million pounds in the six months to April 30, from 9.9 million pounds a year earlier.

“H1 performance was ahead of our expectations reflecting strong performance in both segments and some positive timing differences,” the company said.

Order intake rose 1% to 250 million pounds in the first half, leaving the company with an order book of 504 million pounds.

The company said it has received additional delivery orders worth $32 million for the next phase of the Husky Mounted Detection System IDIQ from the United States, besides winning a U.S. Navy contract in May, which is expected to be worth up to $100 million over 5-10 years.

Chemring, which employs about 2,500 people worldwide, said all its businesses have remained open despite COVID-19 challenges.

The London-listed company also reduced its debt pile by 30% to 60.6 million pounds as of April-end and raised interim dividend by 8% to 1.3 pence per share.

Reporting by Shanima A in Bengaluru; Editing by Vinay Dwivedi

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