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(Alliance News) - Chemring Group PLC on Tuesday provided an optimistic outlook, citing the need to modernise Nato's defence capabilities, as it reported underlying pretax profit growth.
The Romsey, England-based provider of technology products and services to aerospace, defence and security markets said revenue rose 18% to GBP472.6 million in the financial year ended October 31 from GBP401.0 million a year earlier.
Underlying pretax profit jumped 24% to GBP71.7 million from GBP57.9 million, while statutory pretax profit fell 7.9% to GBP44.1 million from GBP47.9 million. Chemring explained the discrepancy due to an impairment of chemical detection asset, costs relating to acquisitions and amortisation of bought intangibles, among others.
The company noted that 2023 results were slightly ahead of the board's initial expectations despite foreign exchange headwinds.
On the back of the results, Chemring upped its dividend per share by 21% to 6.9 pence from 5.7p.
The company said trading since the start of its new financial year has been in line with expectations. The group order book as at October 31 was GBP921.6 million, up 42% from GBP650.9 million a year prior.
Chief Executive Michael Ord said: "2023 was another year of strong group performance; and in an environment of increasing global uncertainty demand continues to grow for our mission-critical products and services. With record order intake and an order book at the highest level in over a decade the group is well placed for continued delivery of sustainable performance and growth."
Looking ahead, the company said: "The Russia-Ukraine conflict has specifically refocused attention on the broad spectrum of defence capabilities relevant to a significant peer conflict. It has also brought a renewed focus on modernisation and replacement of Nato capabilities, including those being donated to assist Ukraine. China's extensive military modernisation programme has in many cases, generated a requirement for increasingly cutting-edge solutions to protect against a continuum of threats."
Chemring shares were 1.4% lower at 323.00 pence each on Tuesday morning in London.
By Tom Budszus, Alliance News slot editor
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