Financial Statements - Chemring Group PLC
Financial Statements - Chemring Group PLC Financial Statements - Chemring Group PLC
C H E M R I N G G R O U P P L CReview by the Chief ExecutiveOverviewAn excellent year for the Group withall continuing operations increasingprofitability, and the disposal of theremaining non-core operationscompleted. Defence turnover was up35% to £86 million and the closingorder book was at a similar level toprovide a sound start for this year.Sales in the continuing marine safetyand security business increased by 24%,supported by 50% growth in electronicproducts sales.Kilgore resumed full operations in thesecond half. One and a half milliondecoys were produced at the newfacility during the year. Kilgorecontributed £24 million to totalcountermeasures turnover during theyear, which increased by 45% to£66.4 million.Military pyrotechnics turnoverincreased by 9% to £19.5 million,assisted by increased pyrotechnicproduct sales at Kilgore.Operational ReviewCountermeasures:Countermeasures turnoverincreased by 45% to £66.4 millionThe excellent growth in thecountermeasures business reflects ourposition as the worldwide marketThe Group’s activities are covered underthe following headings:Countermeasures:Chemring Countermeasures,Alloy Surfaces, Kilgore, Pains Wessex AustraliaMilitary Pyrotechnics: PW Defence, Kilgore,Pains Wessex AustraliaMarine Safety and Security: McMurdo Marine, ICS Electronics,McMurdo Pains Wessex,Oroquieta, Pains Wessex AustraliaTurnover by Business Area for theyear ended 31 October 2003£66.4M£19.5M£8.2M£26.4MCountermeasuresMilitary PyrotechnicsOverseas/UKSales SplitUK 24%Overseas 76%Marine Safety and SecurityDiscontinuedleader in providing expendable decoysto protect valuable military platforms.We are the pre-eminent provider ofaircraft IR expendable decoys to theUS Department of Defense. There isparticularly strong US demand for ourproducts to protect military aircraftfrom missile attack, in particular IRMan-Portable Air Defence Systems.These systems have been prevalent inthe Iraq campaign, where therecontinue to be numerous attacks onboth helicopters and fixed wingtransport aircraft.Recently there have been severalinitiatives on commercial aircraftprotection. The most significant ofthese has originated from theDepartment of Homeland Security(DHS) in the US. Alloy Surfaces isincluded in the United Airlines team,which is one of the three consortiaselected by the DHS to develop asystem to protect commercial aircraft.Decoy sales to the US militaryincreased by 33% to £31 millionduring the year. These sales accountedfor 47% of total countermeasuresturnover.Alloy Surfaces is benefiting from newprogrammes to improve helicopterprotection and increased operationaluse of its decoys in pre-emptive mode,which denies missiles the ability tolock-on and hence attack the aircraft.Alloy Surfaces is making significantinroads into the international marketwith non-US sales increasing to 30%of total sales. Major sales wererecorded in the UK, Australia, Canadaand Japan. A joint US andP 6
2 0 0 3 F I N A N C I A L S T A T E M E N T SItalian Air Force test is scheduled toevaluate Alloy Surfaces’ decoys fordeployment on Italy’s new C130Jtransport aircraft.During the year Kilgore was awardedinitial decoy production contracts forboth of the new US fighter aircraft anddevelopment contracts for decoys foremerging multi-role platforms.Alloy Surfaces and Kilgore have alsobeen selected to provide an improveddecoy for the B52 bomber.The Group has invested a total of£17.5 million in manufacturingfacilities over the last three years atKilgore and Alloy Surfaces in supportof the US defence industrial base.Further investment will be made inproduction capacity at Alloy Surfacesin 2004 to meet the increasing demandfor its products. Considerable resourcehas also been put into modelling andsimulation to improve our technologyand marketing capabilities, whichdemonstrates our ability to provide asystems solution to defeat advancedthreats across all services. Theintention is to read across elements ofthis research into the DHS requirementsfor commercial aircraft protection.Our UK based business,Chemring Countermeasures, had anexcellent year with increased exportscontributing to a 32% increase inturnover. The UK business has astrong technical capability which iscontinually bringing new products tothe market including the proprietarymodular expendable blocks forenhanced helicopter protection andchaff and flare decoys for formerSoviet Union platforms such asMiG29 fighters and Mi-24 helicopters.Chemring Countermeasures’ decoys area front runner in protecting the A400M(formerly known as the Future LargeAircraft) on order for the air forces ofBelgium, France, Germany, Italy, Spain,Turkey and the UK. The business has astrong ship decoy order book, includingIR rounds for Australia and RF forJapan. Transfer of its ship decoytechnology to our US subsidiaries isassisting penetration into the US navalmarkets, including US ForeignMilitary Sales.In the US, Kilgore won its first exportorder for IR ship decoys, and is alsosupporting the US Navy on a future IRship decoy requirement. Alloy Surfacesis supporting Northrop Grumman on alow cost modular EW system for theprotection of a wide range of vehicles.Our countermeasures activity has morethan doubled over the last four years,and we continue to invest in researchand development as well as productionfacilities to protect our prominentposition as the market leader and pursuethe many opportunities available to us.Military PyrotechnicsMilitary Pyrotechnics turnoverin the year increased by 9%to £19.5 millionOur military pyrotechnics business is atthe forefront of providing specialistmilitary pyrotechnic products used inillumination, screening, signalling andtraining. Overseas sales were 67% oftotal military pyrotechnics turnover.Despite the financial pressures ongovernments’ defence expenditure, thereis continuing strong internationaldemand for our products against abackground of political tensions whichhave increased awareness of the needfor training.Kilgore is increasing its activity inillumination and screening products fortarget and rescue applications. Kilgoreis the main supplier to the US Navy ofMk58 pyrotechnic marine locationmarkers. In addition to being used foranti-submarine warfare, the Mk58marker is used for search and rescueoperations, man-overboard markings,and for target practice at sea. Kilgorewon an additional order fromGeneral Dynamics for smoke andscreening products, and follow-onorders are expected. Kilgore is also aconduit into the US military marketfor the Group’s UK based militaryvehicle decoy and screening productsand technology, and is involved insupporting General Dynamics LandSystems on future military vehicleprotection in the high profileUS Army Future Combat Systemsprogramme.In June 2003, PW Defence secured apartnering agreement with theUK MoD covering the procurementand through-life management of themajority of the MoD’s militarypyrotechnic requirements. Theagreement is a vehicle for takingforward a number of initiatives,including improvements in the supplychain, smart procurement andmanufacturing, and full-life support.Marine Safety and SecurityMarine Safety and Securityturnover in the year increased by24% to £26.4 millionThe Group is a leading supplier ofP 7
- Page 1 and 2: C H E M R I N G G R O U P P L CF I
- Page 3 and 4: 2 0 0 3 F I N A N C I A L S T A T E
- Page 5 and 6: 2 0 0 3 F I N A N C I A L S T A T E
- Page 7: 2 0 0 3 F I N A N C I A L S T A T E
- Page 11 and 12: 2 0 0 3 F I N A N C I A L S T A T E
- Page 13 and 14: 2 0 0 3 F I N A N C I A L S T A T E
- Page 15 and 16: 2 0 0 3 F I N A N C I A L S T A T E
- Page 17 and 18: 2 0 0 3 F I N A N C I A L S T A T E
- Page 19 and 20: 2 0 0 3 F I N A N C I A L S T A T E
- Page 21 and 22: 2 0 0 3 F I N A N C I A L S T A T E
- Page 23 and 24: 2 0 0 3 F I N A N C I A L S T A T E
- Page 25 and 26: 2 0 0 3 F I N A N C I A L S T A T E
- Page 27 and 28: 2 0 0 3 F I N A N C I A L S T A T E
- Page 29 and 30: 2 0 0 3 F I N A N C I A L S T A T E
- Page 31 and 32: 2 0 0 3 F I N A N C I A L S T A T E
- Page 33 and 34: 2 0 0 3 F I N A N C I A L S T A T E
- Page 35 and 36: 2 0 0 3 F I N A N C I A L S T A T E
- Page 37 and 38: 2 0 0 3 F I N A N C I A L S T A T E
- Page 39 and 40: 2 0 0 3 F I N A N C I A L S T A T E
- Page 41 and 42: 2 0 0 3 F I N A N C I A L S T A T E
- Page 43 and 44: 2 0 0 3 F I N A N C I A L S T A T E
- Page 45 and 46: 2 0 0 3 F I N A N C I A L S T A T E
- Page 47 and 48: 2 0 0 3 F I N A N C I A L S T A T E
- Page 49 and 50: 2 0 0 3 F I N A N C I A L S T A T E
- Page 51 and 52: 2 0 0 3 F I N A N C I A L S T A T E
- Page 53 and 54: 2 0 0 3 F I N A N C I A L S T A T E
- Page 55 and 56: 2 0 0 3 F I N A N C I A L S T A T E
- Page 57 and 58: 2 0 0 3 F I N A N C I A L S T A T E
2 0 0 3 F I N A N C I A L S T A T E M E N T SItalian Air Force test is scheduled toevaluate Alloy Surfaces’ decoys fordeployment on Italy’s new C130Jtransport aircraft.During the year Kilgore was awardedinitial decoy production contracts forboth of the new US fighter aircraft anddevelopment contracts for decoys foremerging multi-role platforms.Alloy Surfaces and Kilgore have alsobeen selected to provide an improveddecoy for the B52 bomber.The <strong>Group</strong> has invested a total of£17.5 million in manufacturingfacilities over the last three years atKilgore and Alloy Surfaces in supportof the US defence industrial base.Further investment will be made inproduction capacity at Alloy Surfacesin 2004 to meet the increasing demandfor its products. Considerable resourcehas also been put into modelling andsimulation to improve our technologyand marketing capabilities, whichdemonstrates our ability to provide asystems solution to defeat advancedthreats across all services. Theintention is to read across elements ofthis research into the DHS requirementsfor commercial aircraft protection.Our UK based business,<strong>Chemring</strong> Countermeasures, had anexcellent year with increased exportscontributing to a 32% increase inturnover. The UK business has astrong technical capability which iscontinually bringing new products tothe market including the proprietarymodular expendable blocks forenhanced helicopter protection andchaff and flare decoys for formerSoviet Union platforms such asMiG29 fighters and Mi-24 helicopters.<strong>Chemring</strong> Countermeasures’ decoys area front runner in protecting the A400M(formerly known as the Future LargeAircraft) on order for the air forces ofBelgium, France, Germany, Italy, Spain,Turkey and the UK. The business has astrong ship decoy order book, includingIR rounds for Australia and RF forJapan. Transfer of its ship decoytechnology to our US subsidiaries isassisting penetration into the US navalmarkets, including US ForeignMilitary Sales.In the US, Kilgore won its first exportorder for IR ship decoys, and is alsosupporting the US Navy on a future IRship decoy requirement. Alloy Surfacesis supporting Northrop Grumman on alow cost modular EW system for theprotection of a wide range of vehicles.Our countermeasures activity has morethan doubled over the last four years,and we continue to invest in researchand development as well as productionfacilities to protect our prominentposition as the market leader and pursuethe many opportunities available to us.Military PyrotechnicsMilitary Pyrotechnics turnoverin the year increased by 9%to £19.5 millionOur military pyrotechnics business is atthe forefront of providing specialistmilitary pyrotechnic products used inillumination, screening, signalling andtraining. Overseas sales were 67% oftotal military pyrotechnics turnover.Despite the financial pressures ongovernments’ defence expenditure, thereis continuing strong internationaldemand for our products against abackground of political tensions whichhave increased awareness of the needfor training.Kilgore is increasing its activity inillumination and screening products fortarget and rescue applications. Kilgoreis the main supplier to the US Navy ofMk58 pyrotechnic marine locationmarkers. In addition to being used foranti-submarine warfare, the Mk58marker is used for search and rescueoperations, man-overboard markings,and for target practice at sea. Kilgorewon an additional order fromGeneral Dynamics for smoke andscreening products, and follow-onorders are expected. Kilgore is also aconduit into the US military marketfor the <strong>Group</strong>’s UK based militaryvehicle decoy and screening productsand technology, and is involved insupporting General Dynamics LandSystems on future military vehicleprotection in the high profileUS Army Future Combat Systemsprogramme.In June 2003, PW Defence secured apartnering agreement with theUK MoD covering the procurementand through-life management of themajority of the MoD’s militarypyrotechnic requirements. Theagreement is a vehicle for takingforward a number of initiatives,including improvements in the supplychain, smart procurement andmanufacturing, and full-life support.Marine Safety and SecurityMarine Safety and Securityturnover in the year increased by24% to £26.4 millionThe <strong>Group</strong> is a leading supplier ofP 7
Change language