British defence group Chemring lost a tenth of its value as problems at its countermeasures business in Tennessee overshadowed the largest order book in its history.
On a tough day for the FTSE 250 explosives maker, shares fell 13 per cent, or 47p, to 314.5p as it continued to lag behind larger peers such as BAE Systems, which also drifted lower by 2.3 per cent, or 27p, to 1170p but remains up 40 per cent in the past two years compared with Chemring’s gain of just 7 per cent.
The sell-off came even as Chemring, which makes countermeasures for 85 per cent of Nato air fleets and 60 per cent of Nato naval fleets, reported a record order book of just over £1billion amid political tensions worldwide and the war in Ukraine.
It also posed an 8 per cent rise in annual revenues to £510.4million for the 12 months to the end of October but profits slipped 2 per cent to £66.3million and the company warned its profit margins have narrowed due to ‘operational challenges at our Tennessee countermeasures business’.
Production at the plant has been hit by adverse weather and delays.
‘At a time when much of its peer group is benefiting from an increase in global security risks and instability, defence outfit Chemring continues to shoot itself in the foot,’ was the brutal assessment of Russ Mould, investment director at AJ Bell.
Mayday: Shares in UK defence group Chemring plummeted 13% following problems at its countermeasures business in Tennessee
With strong wage growth in the UK making an interest rate cut this side of Christmas all the more unlikely, the FTSE 100 fell 0.8 per cent, or 66.85 points, to 8195.2 and the FTSE 250 dropped 1.3 per cent, or 270.17 points, to 20542.86.
While Chemring was the biggest faller in the second tier, Bunzl led the way down among the blue-chips after it warned lower prices for its goods across Europe will hit profits.
The company, which supplies products such as toilet roll, disposable cups, food packaging and hard hats, said it still expected ‘robust’ revenue growth in 2025.
But shares fell yesterday by 5.7 per cent, or 202p, to 3356p.
Commercial property developer Land Securities – or Landsec as it is known – has bought a 92 per cent stake in shopping centre Liverpool One for £490million as it looks to cash in on retailers’ focus on ‘bigger and better’ stores.
The company purchased the stake from a subsidiary of the Abu Dhabi sovereign wealth fund, which held 69 per cent interest in the centre, and the Duke of Westminster’s property group Grosvenor, which owned 23 per cent.
Liverpool One is considered one of UK’s premier shopping centres, boasting an annual footfall of 22m people. Landsec shares gained 0.3 per cent, or 1.5p, to 572p.
Shares in FTSE 250 engineering group Goodwin jumped 6.8 per cent, or 460p, to 7220p after it reported a 38 per cent rise in half-year profits to £16.7million after a 9 per cent rise in revenues to £106.4million.
The company said it expects ‘a similar level of activity’ in the second half of the financial year, which ends on April 30.
Analysts at Shore Capital hailed an ‘excellent’ set of results.
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