Chemring's shares have resembled a war zone where one might find its flares and road-side bomb detectors - chaotic and dangerous. A bid approach from US private equity firm Carlyle in the middle of August caused a brief lull in the fighting, but another profits warning less than a fortnight later shows just why investors should tread carefully.
Full-year operating profit will be £15m lighter after the US army delayed a contract to make landmine clearing kit and Chemring had problems with a new computer system. The order book is down 9 per cent, too. This would have taken Carlyle by surprise and explains why the spike in Chemring's share price was so brief - the approach was, after all, "highly preliminary". The Americans have until 14 September to make up their minds.
