Chemring ditches chief executive as losses soar
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.
- 1 Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
- 2 Christians: The world's most persecuted people
- 3 The secret report that helps Israelis to hide facts
- 4 Danish TV reporter is all business up top, all party down below
- 5 Denmark bans kosher and halal slaughter as minister says ‘animal rights come before religion’
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Israel-Gaza conflict: The children were playing in the street with toy guns. The missiles were tragically real
Danish TV reporter is all business up top, all party down below
Syria conflict: Syrian and Turkish Kurds unite to battle Isis threat - ‘We shoot them like sheep, but next day double the number return’
Ross Burden dead: MasterChef and Ready Steady Cook star, dies aged 45
The secret report that helps Israelis to hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
Were 'Poor Doors' added to mixed developments so wealthy residents don't have to go in alongside social housing tenants?
A new Russian revolution: The cracks are starting to appear in Putin’s Kremlin power bloc
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Opponents of Israel's military operation in Gaza are the real enemies of Middle Eastern peace
iJobs Money & Business
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£350 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...
£500 - £560 per day: Orgtel: Java Developer FX - Banking - London - Up to £560...
£350 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...
£26000 - £30000 per annum + Benefits: Ashdown Group: Account Manager - (Produc...