Chemring Regulatory News (CHG)

21 MARCH 2016

CHEMRING GROUP PLC

ANNUAL GENERAL MEETING TRADING UPDATE

Chemring Group PLC ("Chemring" or "the Group") today issues an update on current trading and outlook, at the time of the Group's Annual General Meeting.

Current trading

Revenue during the three month period to 31 January 2016 was £82.9 million, compared with £61.5 million in the same period last year, with increases in each of the Group's three operating segments. As reported in the results announcement issued on 21 January 2016, Q1 FY16 trading performance was below management's expectations due to a lower margin sales mix, customer acceptance delays, and specific production and contract finalisation issues.

The order book at 31 January 2016 was £593.8 million (31 October 2015: £569.6 million).

The 40mm ammunition order for an end user in the Middle East continues to progress towards initial revenues. A further announcement will be made once the advance payment has been received.

Current financial position

Net debt at 31 December 2015 was £195 million. Net debt at 31 January 2016 was £198.4 million (31 January 2015: £162.1 million, 31 October 2015: £154.3 million). The recent strengthening of the US dollar increased the translated value of the Group's debt in the three month period by £14.1 million. Cash flows in the three month period were impacted by the weaker trading and increased working capital, combined with normal seasonal effects, however these are expected to unwind in the second half of FY16. Since 31 January 2016, the Group has received £75.2 million net proceeds of the Rights Issue and is in the process of offering a proportion of the proceeds to loan note holders.

Board changes

Ian Much will retire at today's Annual General Meeting. Daniel Dayan joined the Board on 7 March 2016 and will succeed him as Chairman of the Remuneration Committee. The process of appointing a successor to the Chairman, Peter Hickson, continues to progress.

Outlook

The Board's expectations for trading and net debt for the full year remain unchanged. The continued delayed start to the 40mm ammunition contract and revenue mix have consequently led to an increased weighting in both profit and cashflow towards the second half.

-ENDS-

For further information:

Michael Flowers Group Chief Executive, Chemring Group PLC 01794 833901

Steve Bowers Group Finance Director, Chemring Group PLC 01794 833901

Rupert Pittman Group Director of Communications and 01794 833901

Investor Relations, Chemring Group PLC

James White MHP Communications 0203 128 8100

Cautionary statement

This announcement contains unaudited information based on management accounts and forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Chemring's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are; increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approvals for engineering or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects.

Chemring undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.

Notes to editors

· Chemring is a global business that specialises in the manufacture of high technology products and services to the aerospace, defence and security markets

· Employing approximately 3,000 people worldwide, and with production facilities in four countries, Chemring meets the needs of customers in more than fifty countries worldwide

· Chemring is now organised under three strategic product segments: Countermeasures, Sensors & Electronics, and Energetic Systems

· Chemring has a diverse portfolio of products that deliver high reliability solutions to protect people, platforms, mission and information against constantly changing threats

· Operating in niche markets and with strong investment in research and development, Chemring has the agility to rapidly react to urgent customer needs

www.chemring.co.uk