Incident at Chemring Countermeasures

Chemring Group PLC (“Chemring” or “the Group”) confirms that at approximately 5pm on Friday 10th August, an incident occurred in a flare manufacturing building at the Chemring Countermeasures (“CCM”) facility, near Salisbury.

Tragically, one employee was fatally injured and another employee was badly injured and is currently receiving treatment in hospital. The emergency services attended the scene and the incident was quickly brought under control.

A full and immediate investigation into the cause of the incident has been launched in co-operation with the local regulatory authorities.

The incident caused damage to parts of CCM’s manufacturing operations. Production at the site is currently suspended and a detailed analysis of the possible impact of the incident on the Group’s financial prospects has begun.

The impact on our 2018 and 2019 financial years cannot be accurately quantified at this stage as it will be dependent on insurance recoveries, the timeline for the investigation to be completed and the site to re-open, remediation work to be completed and at what rate production resumes.

CCM’s deliveries to customers in the final quarter of the financial year ending 31 October 2018 were previously expected to be £25m and to generate a contribution of £15m and the Group’s FY18 underlying operating profit is now likely to be approximately £10m - £20m lower than previous expectations, with a corresponding impact on the Group’s operating cash flow and net debt.

A further update will be provided when the Group publishes its next trading statement, which is expected on 4 September 2018.

Source: Chemring Group, PLC
Date: Aug 12, 2018