By Geoffrey Smith
Investing.com -- Shares in Chemring (LON:CHG) rose by mid-morning in London on Tuesday after a surge in demand for its products due to Russia's war in Ukraine allowed the defense and aviation supplier to cut debt and raise its dividend.
Chemring, which makes high-performance explosives as well as sensors and other defense-related equipment, said it will raise its final dividend by 19%, bringing the full payout for the year through October to 5.7 pence a share. Net debt, meanwhile, fell by over 70% to £7.3 million (£1=$1.2284).
The outlook for Chemring's two main businesses has improved dramatically over the last 12 months as the pandemic has receded, allowing a sharp rebound in commercial air traffic, and western governments have been shaken out of decades of complacency with regard to defense planning by Russia's invasion of Ukraine.
Revenue rose 13% to £442M, with new orders rising at more than twice that rate to £551M, £158M of which fell to its Roke division, which houses the company's research into countermeasures against the new generation of hypersonic missiles currently being tested in Russia and China.
Order backlogs as of the end of the fiscal year stood at £651M, a rise of 30% from a year earlier.
Underlying pretax profit rose 12% to £62M, a fraction below consensus expectations for £64M.
The company repeated its guidance for the current year, saying that some 86% of expected revenue is already covered by the order book.