Chemring NED nails his colours to the mast

And Mr Papworth will need it. Lower volumes, production delays and a shrinking order book smashed underlying earnings in the first half and sales slumped at both the countermeasures and pyrotechnics and munitions divisions. Troop withdrawal from Afghanistan, estimated at 15 per cent of group orders, will not help, either. If that business cannot be replaced, more cost savings will be needed to underpin the two-year recovery strategy.

Clearly, we’re concerned about the short-term outlook and threat of more aggressive cost reductions in the US. Many of Chemring’s businesses are short-cycle in nature and visibility is poor. Clearly, Mr Hamment is more bullish. Others are, too, and the share price has broken above 300p for the first time in six months. Yes, that’s encouraging, but it does not yet confirm an upward trend, and we would rather wait until the fundamentals improve. Hold

Lee Wild

Britvic’s finance director offloads on a high

Britvic’s (BVIC) share price has risen 79 per cent in the past year to 540p, despite falling sales and profits, with a recent improvement driven by strong pricing and cost control, rather than volume growth. But, with the share price at a five-year high, it’s perhaps no wonder that Britvic’s finance director, John Gibney, offloaded 35 per cent of his stake in the beverages company. On 26 July he sold 130,000 shares, priced at 519p each, giving him a windfall of £674,700. That leaves him with 243,813 shares. The news came as we changed our view on Britvic, and tipped the stock as a sell on 25 July. Our reasoning was that volumes are falling, trading is tough in core markets and debt is high. We believe a potential merger with peer AG Barr, now scrapped, would have been good for Britvic as it would have created cost savings and made commercial and strategic sense. Management claims Britvic’s performance has improved significantly since it first started courting the idea of a merger with AG Barr, but, as we spelled out in our sell tip, we can’t see that it has. Planned cost savings and restructuring is certainly good news, but this is major change that will be challenging to implement against weak consumer spending and a fiercely competitive market. However, Britvic is doing well in the US, where it is rolling out Fruit Shoot, and increased investment in international expansion should also help. That said, the fast-growing international division represents a tiny portion of overall revenue.

We continue to rate the shares as a sell.

Julia Bradshaw

Buys

Sells

Table compiled by Robert Ansted

Key to abbreviations: ch = chairman; ce = chief executive; cfo = chief financial officer; fd = finance director; coo = chief operating officer; cs =company secretary; md = managing director