Chemring Regulatory News (CHG)

FOR IMMEDIATE RELEASE 11 OCTOBER 2013

CHEMRING GROUP PLC

 TRADING UPDATE

Chemring Group PLC ("Chemring") announces that its UK subsidiary, Chemring Countermeasures Ltd, has been awarded a significant countermeasures contract from a Middle Eastern customer. Revenue and profits associated with this contract will be recognised in the current financial year, as previously anticipated.

The US Government shut down that came into effect on 1 October has resulted in the closure of a large number of Government departments and associated activities. This included the Defense Contract Management Agency ("DCMA"), the Government agency with responsibility for inspecting and approving products for delivery to the US Department of Defense ("US DoD"). While the majority of the DCMA's civilian staff have now returned to work, other Government departments remain closed and this continues to affect Chemring's North American business. The full impact of the US Government shut down is not yet known but it will impact the October order intake and deliveries to the US DoD in the remaining few weeks of the financial year.

Since the publication of the third quarter Interim Management Statement in August, quality and production issues, particularly at Kilgore, have continued, resulting in reduced revenue for this financial year. In addition, the UK£:US$ exchange rate has moved adversely, reducing the sterling value of profits generated in the US.

The Board's current view is that these factors will impact this financial year's operating profit by approximately £8 million.

Recent tensions in the Middle East have constrained the availability of shipping to the region and this will have a short term impact on cash receipts for certain munitions contracts until the first quarter of FY14. However, we continue to closely manage cash and working capital.

FY14 Outlook

At the interim results presentation in June, Chemring announced that it was initiating a comprehensive planning process which would give a better understanding of both the markets in which we operate and our business strategy for the next three years. This is being prepared in conjunction with a detailed budgeting exercise for FY14. Early indications, given the continuing difficult market conditions, are that FY14 performance is likely to be less than the anticipated current year outturn. We will outline the initial findings of this process in a post close trading statement, which is expected to be released in November 2013.

-ENDS-

For further information:

Mark Papworth Group Chief Executive, Chemring Group PLC 01489 881880

Steve Bowers Group Finance Director, Chemring Group PLC 01489 881880

Rupert Pittman Group Director of Communications and

Investor Relations, Chemring Group PLC 01489 881880

Andrew Jaques MHP Communications 0203 128 8100

John Olsen

James White

Cautionary statement

This announcement is based on unaudited management accounts and contains 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 manufacturing business with facilities in eight countries, selling high technology electronics and energetic products to over sixty countries worldwide.

• The Company has a diverse portfolio of products protecting military people and platforms against a constantly changing threat.

• Operating in niche markets with short product development timescales, Chemring has the agility to rapidly react to urgent customer needs.

• Strong R&D investment for new products and improvements in technology continually allows Chemring to expand its addressable markets.

www.chemring.co.uk