Shares in Chemring crashed by more than 6% today as the military equipment maker was again wounded by contract delays.
The defence firm blamed the lateness of the US government’s decision to award it a $579 million (£370 million) support deal for devices used to find roadside bombs in Afghanistan for a 21% fall in underlying pre-tax profit to £39.2 million in the six months to May.
Chemring said the support contract from the US Army to work on Husky Mounted Detection System radars, which troops attach to vehicles to search the ground for explosives, had been signed on the last day of its half year to May.
As a result, it claimed the rest of its year would be “strongly weighted”.
City analysts said Chemring’s contract delays had happened before — but the outlook was positive. John Middleton at JPMorgan said: “The first half looks like déjà vu, but we maintain that a combination of improved order flow... and stronger margins should underpin a substantially stronger second half.”
Chemring chief executive David Price said: “The board is confident that the group will deliver a strong second-half trading performance, with increased operating margins that will enable us to meet our full-year expectations.”
Chemring shares today fell 19.9p to 303.5p.
