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.