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04 Mar 2021 | 08:51

Chemring says weak dollar could affect results

(Sharecast News) - Chemring said trading was in line with expectations but that the weaker US dollar could hit its results in the current financial year. The defence company said orders in the period to 28 February was £128m compared with £132m a year earlier. At the end of February the order book, which has been affected by the weaker dollar was £481m, up from £478m.

Chemring said the dollar had dipped to an average of $1.37 from $1.28 in the first half of 2020, creating a 7% "headwind". Half of group revenues are in dollars and a weakening of the dollar by 10 cents would reduce annual revenue by £13m and underlying operating profit by £2m, the FTSE 250 group said.

"Trading since the start of the current financial year has been as expected," Chemring said. "With the exception of the potential impact of foreign currency translation, discussed below, the Board's expectations for the current year remain unchanged."

The company also said the delivery of some manufacturing equipment to its facility in Tennessee had been delayed by Covid-19. "We still expect to generate incremental revenue from the new facility during the second half of our 2022 financial year," Chemring said.

Chemring shares fell 0.2% to 278.5p at 09:20 GMT.

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