MARKET REPORT: Chemring crashes 13% despite record £1bn orders

British defense 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, its shares fell 13 per cent, or 47p, to 314.5p, as it lagged behind bigger rivals such as BAE Systems, which also fell 2.3 per cent, or 27p, to 1170p. but continues to rise 40 percent over the past two years, compared to Chemring’s gains of just 7 percent.

The sell-off came at the same time as Chemring, which provides countermeasures for 85 percent of NATO’s air fleets and 60 percent of NATO’s naval fleets, reported a record order book of just over £1 billion, amid global political tensions and the war in Ukraine.

It also delivered an 8 per cent increase in annual turnover to £510.4m for the 12 months to the end of October, but profits fell 2 per cent to £66.3m and the company warned that profit margins have narrowed as as a result of ‘our operational challenges’. Tennessee countermeasures company’.

Production at the factory was affected by bad weather and delays.

“At a time when many of its peers are benefiting from a rise in global security risks and instability, defense company Chemring continues to shoot itself in the foot,” was the brutal assessment of Russ Mould, investment director at AJ Bell.

With strong wage growth in Britain making a rate cut this side of Christmas all the more unlikely, the FTSE 100 fell 0.8 percent, or 66.85 points, to 8,195.2 and the FTSE 250 fell 1.3 percent , or 270.17 points, to 20542.86. .

While Chemring was the biggest faller in the second segment, Bunzl led among the blue chips after it warned that lower prices for its goods across Europe would hit profits.

The company, which supplies products such as toilet paper, disposable cups, food packaging and safety helmets, still expects ‘robust’ sales growth in 2025.

But shares fell 5.7 per cent, or 202p, to 3356p yesterday.

Commercial property developer Land Securities – or Landsec as it is known – has bought a 92 per cent stake in Liverpool One shopping center for £490 million, as it looks to cash in on retailers’ focus on ‘bigger and better’ stores.

The company bought shares from a subsidiary of Abu Dhabi’s sovereign wealth fund, which had a 69 percent stake in the centre, and from the Duke of Westminster’s property group Grosvenor, which owned 23 percent.

Liverpool One is considered one of Britain’s best shopping centres, with an annual footfall of 22 million people. Landsec shares rose 0.3 percent, or 1.5p, to 572p.

Shares in FTSE 250 engineering group Goodwin rose 6.8 per cent, or 460p, to 7220p after it reported a 38 per cent rise in half-year profit to £16.7 million, following a 9 per cent rise in sales to £106.4 million.

The company said it expects “a similar level of activity” in the second half of the fiscal year ending April 30.

Shore Capital analysts praised an “excellent” set of results.