(Reuters) – Defence contractor Chemring Group Plc <CHG.L> said on Thursday it would exit some businesses in its Energetics segment that makes components for explosives as part of a restructuring and that it would not reopen a blast-hit unit at its CCM factory.
The company expects to record a non-cash impairment charge of about 68 million pounds ($88 million) in 2018 against the businesses which it would discontinue and classify as held for sale. http://bit.ly/2QKrM2O
“The future focus within the Energetics segment should be on the niche specialist energetic materials businesses in Chicago, Ardeer and Norway,” the company said.
Shares of Chemring, which reported lower full-year revenue, fell 2.7 percent to their lowest since January.
The production line at the CCM factory was affected after an explosion in August that killed an employee.
The segments that Chemring will exit under its Energetics business – which provides components for explosives and other devices – are located in Derby and Florida, it said.
The British contractor, which also makes mechanisms used in ejection seats, has benefitted from increased defence spending by the United States under President Donald Trump.
Chemring reiterated that the countermeasures market continues to recover, primarily driven by the United States.
Total full-year revenue fell to 436 million pounds ($566.10 million) from 547 million pounds a year earlier. Of this, 139 million pounds came from the businesses it is exiting.
The company said excluding the impact of the CCM factory blast this year, trading across the group in the fourth quarter was in line with its expectations.
($1 = 0.7692 pounds)
(Reporting by Pushkala Aripaka in Bengaluru; Editing by Gopakumar Warrier)