Little seems to go right for defence contractor Chemring. Major markets are drying up, orders are being delayed elsewhere and a new product has suffered technical problems. It’s issued two profit warnings in recent months and Carlyle, a potential white knight, walked away. Chief executive David Price lost his job, too, and it’s up to new boss Mark Papworth to stop the rot.
Expectations are high. Mr Papworth ran the gas turbines services division at Wood Group and oversaw a strategic review that delivered a big increase in profits, but repeating the feat at Chemring will not be easy. It’s just confirmed revenue for the year to 31 October rose just 2 per cent to £740m and an order book of £760m is £118m lighter than last year. Analysts at Investec Securities think underlying pre-tax profit will have slumped 41 per cent to £70.8m. We know the numbers are poor, so much will depend on what Mr Papworth says when results are published on 24 January. Restoring credibility and operational efficiency will be crucial.
