Chemring ditches chief executive as losses soar

Associate Business editor

The military-equipment maker Chemring has sacked its chief executive, Mark Papworth, after the group was hit by a £72m pre-tax loss in just six months.

US and Nato spending cuts, coupled with armed forces withdrawal from Afghanistan, have badly hit the 109-year-old company, best known for designing ejector seats and decoy flares that can defeat guided missiles fired at aircraft.

This year's interim figures were even grimmer than the first half of last year, when pre-tax losses were only £9.2m. Its revenues were down 6.7 per cent to £277.4m and the interim dividend slipped from 3.4p to 2.4p a share.

In a stinging rebuke, Chemring's chairman, Peter Hickson, said the business would be better served by a chief executive who had "a different set of skills" – particularly knowledge and understanding of the defence markets "in which we operate".

Mr Papworth lasted only 20 months on the frontline, during which time the defence group's shares have fallen by more than a third. He has been replaced with "immediate effect" by Michael Flowers – the former head of Chemring's Australian business and countermeasures group director.

Mr Flowers has been rewarded for handling the recent sale of the FTSE 250 group's European munitions business for £134.5m to Nexter Systems of France. He previously worked with Europe's biggest defence contractor, BAE Systems, and served in the Australian army for 22 years.

Chemring's countermeasures division was hit by a fatal accident at its Kilgore plant in the US, which led to production being halted for an investigation. Revenues fell by 24 per cent to £43.5m and operating profits sank 70 per cent to £1.5m.

Mr Hickson said: "We are now moving from a period of critical and significant change to one where we must take maximum advantage of the stronger platform that has been created."

Globally, defence spending is not expected to recover until 2016, though the small South American market is growing.

Ben Bourne, an analyst at Liberum, warned: "End markets remain challenging and customer behaviour difficult to predict."

Shares in Chemring fell 17.5p, or 8 per cent, to 190p.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Day In a Page

Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor
The ZX Spectrum has been crowd-funded back into play - with some 21st-century tweaks

The ZX Spectrum is back

The ZX Spectrum was the original - and for some players, still the best. David Crookes meets the fans who've kept the games' flames lit
Grace of Monaco film panned: even the screenwriter pours scorn on biopic starring Nicole Kidman

Even the screenwriter pours scorn on Grace of Monaco biopic

The critics had a field day after last year's premiere, but the savaging goes on
Menstrual Hygiene Day: The strange ideas people used to believe about periods

Menstrual Hygiene Day: The strange ideas people once had about periods

If one was missed, vomiting blood was seen as a viable alternative
The best work perks: From free travel cards to making dreams come true (really)

The quirks of work perks

From free travel cards to making dreams come true (really)
Is bridge the latest twee pastime to get hip?

Is bridge becoming hip?

The number of young players has trebled in the past year. Gillian Orr discovers if this old game has new tricks
Long author-lists on research papers are threatening the academic work system

The rise of 'hyperauthorship'

Now that academic papers are written by thousands (yes, thousands) of contributors, it's getting hard to tell workers from shirkers
The rise of Lego Clubs: How toys are helping children struggling with social interaction to build better relationships

The rise of Lego Clubs

How toys are helping children struggling with social interaction to build better relationships
5 best running glasses

On your marks: 5 best running glasses

Whether you’re pounding pavements, parks or hill passes, keep your eyes protected in all weathers
Joe Root: 'Ben Stokes gives everything – he’s rubbing off on us all'

'Ben Stokes gives everything – he’s rubbing off on us all'

Joe Root says the England dressing room is a happy place again – and Stokes is the catalyst
Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

Please save my husband

As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada