Apologies for longwinded post.



This company does not seem to be on any thread on this board, but I think worth a look.



ALTHOUGH INVOLVED IN ARMS THE PRODUCTS ARE FOR DEFENCE PURPOSES such as decoys

I have bought and sold shares in this company a few times since November 05.

Its rate of growth have be tremendous as has the share price. Approximate rate of growth for last year was 90% p.a.

I paid it another visit after reading the Times article and followed it initially with view to buy as shares bets or shares. The spread is a bit wide and unsuitable for SBs about 0.7%, but as a long term hold may be useful. BUT DO YOUR OWN HOMEWORK.

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AFX News Feed

CHEMRING 25/4/07

LONDON (Thomson Financial) - Chemring Group PLC said first-half trading was in line with its expectations, adding that full-year prospects are good as its order book continues to grow. The military manufacturer said the first month performance of Italian munitions firm Simmel Difesa SpA, which it acquired on March 30, has been encouraging. Chemring added Simmel's acquisition for 49 mln stg is expected to be accretive to its earnings in the first full financial year post-completion. First-half results are expected to be announced on June 26, Chemring said. TFN.newsdesk@thomson.com ukn/ic COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

Friday, 30/03/07, 16:01


LONDON (AFX) - Military manufacturer Chemring has acquired the entire issued shares of Italian munitions specialist Simmel Difesa SpA for 77 mln eur, as part of its ongoing strategy of expanding its presence in the munition and explosive ordnance disposal markets.
The acquisition was funded by the issue of 373,551 new Chemring shares, and a cash payment of 67 mln eur funded by new bank facilities. newsdesk@afxnews.com bsd/nes COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

22/03/07, 14:58
LONDON (AFX) - Military manufacturer Chemring has acquired the entire issued shares of Italian munitions specialist Simmel Difesa SpA for 77 mln eur, as part of its ongoing strategy of expanding its presence in the munition and explosive ordnance disposal markets.
The acquisition was funded by the issue of 373,551 new Chemring shares, and a cash payment of 67 mln eur funded by new bank facilities. newsdesk@afxnews.com bsd/nes COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited



From The Times
February 16, 2007
US defence giants hunt British takeover targets
Boeing and Lockheed Martin are eyeing British defence companies worth more than 5 billion
David Robertson, Business Correspondent
Boeing and Lockheed Martin are eyeing British defence companies worth more than 5 billion in an attempt to win orders from the Ministry of Defence, The Times has learnt.
The American defence giants are understood already to have independently approached, and been rebuffed by, Ultra Electronics, the 800 million battlefield-IT specialist.
They are also thought to be weighing potential bids for Cobham, Meggitt and Chemring.
The interest being shown by the Americans has put British defence companies on a collision course with the Government over the industrys future.
BACKGROUND
Airbus weighs up factory spin-offs in restructuring
Cargo carrier struggles to stay airborne
Industrialists, including Sir John Rose, chief executive of Rolls-Royce, and Allan Cook, chief executive of Cobham, are concerned that UK plc is being sold off to foreigners.
The crisis of ownership is being particularly felt in the defence sector after the introduction last year of the Governments Defence Industrial Strategy (DIS), which sets out the future for the military-in-dustrial complex in Britain.
Lord Drayson, the Defence Procurement Minister, believes that who owns a defence contractor is less important than where it is based. The DIS states that, as long as the scientists, engineers and technicians that build and maintain Britains military infrastructure remain in the country, it matters less where their employer is from.
American companies wanting to win Ministry of Defence (MoD) orders are therefore having do so through a UK subsidiary.
Both Boeing and Lockheed Martin have set up UK operations and are expanding these organically but they are also looking for acquisitions.
Lockheed Martin, which had operating profits of $4 billion (2 billion) last year, said: We are a growing company and an ambitious company and we will look to move in the direction of acquisitions if it is appropriate to do so.
Boeing, which had profits of $3 billion last year, said: We are mindful of the DIS and the need to keep intellectual property in the UK but we need the capability to do so. We are looking at the option of acquisitions. Last week Sir John Rose gave warning that UK plc was under threat from foreign companies using the country as an aircraft carrier and raiding profits without investing in the future.
Allan Cook, chief executive of Cobham, told The Timesyesterday: This is about national defence and it does matter where the shareholders are.
We have to maintain core skills in aerospace and defence.
The American invasion has already begun with GEs acquisition of Smiths Industries aerospace division last month. Analysts have been speculating for some time that Cobham, Meggitt, Ultra and Chemring could be the next targets.
None of these companies was willing to comment.

Citigroup note:
"How much is a bid worth? Following their rise on Friday the shares have closed the gap to the sector and are now trading on 8.3x and 9.1x our FY12 and FY13 EPS estimates with a FCF yield of 8%. This would suggest to our mind that upside from here is limited with the EV of the business now £1.07bn. If we assume leverage on PE deals to be in the range 4-5x EBITDA, this would imply (using 2012 EBITDA) that Carlyle would need to put in 34% to 43% of equity at the mid point of this range (4.5x) for a bid between 415-500p.
What is in it for Carlyle or another bidder? We continue to believe that elements of Chemring's business offer good upside on a medium term basis. Its market leading countermeasures business should benefit from new air platforms coming online. Further while lower margin, its munitions business offers good exposure to non-NATO markets and its Counter-IED business could see further HMDS orders on a 2-3 year view. All this would suggest not only upside on a medium term basis but could help a potential bidder crystallize value by breaking up the group, our sum of the parts valuation would imply a valuation range of 427-499p
Valuation in line with sector: The shares are now trading on 8.1x 2012 EPS and 9.1x our bottom of the range 2013 EPS. Further, the company faces challenges in recruiting a new CFO, delivering on 2012 EPS and cash numbers and navigating the uncertainty around the US defence outlook. Following Friday’s announcement we have reduced our WACC to 10.3% (11.5%), implying a new TP of 430p (previously 360p) but give n the limited upside, we downgrade our rating to Neutral."

UBS note:
"We would advocate a degree of caution as the release states “highly preliminary” and that CHG was required to issue a statement because of the strong share price movement on Friday (+10% before the release), implying a reasonable chance that the bid does not materialise.
We added Chemring to our UBS M&A watchlist on July 3rd as we thought that the sharp drop in CHG's share price YTD; its depressed valuation relative to peers that we believed did not reflect the intrinsic value of its businesses; the outlook for an improvement in cashflow (lower Capex and growth) and the concentrated list of shareholders had made Chemring an attractive takeover target for a large defence prime or a PE backed LBO/MBO that could delist now at an attractive valuation and refloat the company with lower leverage and higher certainty in a few years time."

Well done if you bought into these recently.

Goldfinger, you are wrong again...


Military equipment maker, Chemring, has seen its shares plunged more than 10% on rumours that a possible takeover by private equity firm Carlyle Group could be about to collapse.

On Friday the share price of the company, which makes flares and equipment for detecting Improvised Explosive Devices, revealed it had been approached after speculation began circling and the share price started to move.

But the company was keen to stress the approach was a "highly preliminary expression of interest" in the hope not to scare off the potential investors.

That didn't stop investors piling in, sending the share price up 26%.

Now that the dust has settled a little and cool heads are prevailing, the sensible investors are beginning to sell and the shareprice now sits down 43.6p, 10.5%, at 371.1p.

Carlyle now has until September 14 to either make a firm offer or walk away.

Recovering from this mornings drop.

SP upgrade by Citigroup.....

* Citigroup cuts Chemring to neutral from buy
* Citigroup raises Chemring price target to 430p from 360p


by SparksTrader • about 30 mins ago Website: www.lse.co.uk
* Espirito Santo raises Anite Plc fair value to 160p from 137p; rating buy
* RBC cuts Balfour Beatty PLC price target to 325p from 350p; rating outperform
* Citigroup cuts Chemring to neutral from buy
* Citigroup raises Chemring price target to 430p from 360p
* JP Morgan raises Diageo price target to 1560p from 1376p; rating underweight
* Citigroup cuts Lonmin PLC price target to 653p from 760p; rating neutral
* Berenberg cuts Travis Perkins PLC to sell from hold
* Citigroup raises Reed Elsevier PLC target price to 670p from 605p; rating buy
* Barclays raises Amlin PLC price target to 492p from 467p;rating overweight
* Jefferies raises Electrocomponents price target to 240p from 190p; rating hold
* Canaccord genuity cuts African Barrick Gold Plc price target to 380p from 440p; rating hold
* Investec raises James Fisher price target to 725p from 685p ; rating buy

Today's update is poor... falling again

INTERIM MANAGEMENT STATEMENT

Current Trading
Trading for the three month period to the end of July 2012 saw steady growth, with revenue in the period up 4% to £165 million from £158 million in the same period last year. Revenue from continuing operations in the nine month period to the end of July 2012 was, therefore, £498 million, 4% higher than in the same period last year. However, we have recently discovered errors within a new Enterprise Resource Planning (ERP) system being installed at our subsidiary in Florida. In addition, we have been informed of several months of delay in the start of production of the MK7 MOD 2 Anti-Personnel Obstacle Breaching System ("APOBS"). Largely as a result of these developments, we have reduced our current expectations for full year operating profit by approximately £15 million, equivalent to about 6 pence of earnings per share.

The Group's order book at the end of July was £910 million, which is 9% lower than at this time last year. This reflects a lower than expected order intake in the period, with orders delayed by the growing length of the export license approval cycle in many European countries and the impact of the early start to Ramadan on Middle East customers. The outlook for the US defence market continues to be uncertain with the majority of our customers indicating that they have no visibility of funding in the next financial year until the funding for the FY2013 defence budget is eventually resolved.

http://www.moneyam.com/action/news/showArticle?id=4433378

Defence contractor Chemring has issued a profits warning, saying a computer glitch and production delays are likely to wipe 15m sterling off full year earnings as it consider a takeover offer from private equity giant Carlyle.

A so-called Enterprise Resource Planning (ERP) system is one of the culprits, with errors having recently been discovered during an installation at Chemring’s Florida subsidiary.

The group has also been hit by “several months” of delays in the production of an anti-personnel obstacle breaching system.

Chemring, which specialises in countermeasures against things like improvised explosive devices (IED), also reports its order book, at £910m, is 9% lower than at the same point of 2011. The company blames the length of time it has taken for European countries to sign on the dotted line and the early start to Ramadan in the Middle East.

In common with most other defence companies, Chemring is also suffering from a failure of American politicians to agree the defence budget for 2013.

There is a high chance private equity giant Carlyle may withdraw from the takeover.

Chemring, the military equipment group which is being stalked by private equity group Carlyle, has slumped nearly 13% after it warned full year profits would miss expectations.

After the initial excitement of the Carlyle approach, the company's shares fell back last week on doubts about whether a deal would actually emerge. There were also fears that cutbacks in defence spending could adversely affect the business.

Now Chemring has admitted that it expected a delay of several months in the start of production of an obstacle breaching system. On top of that it has discovered errors in a resource planning system being installed at its Florida subsidiary. So full year profits will now be around £15m lower than expected. The news has sent its shares 47.7p lower to 322.8p. Carlyle has until 14 September to decide whether to make an offer, but the amount it would need to cough up is falling by the day. Guy Brown at Oriel Securities said:

This warning highlights the seriousness of the issues within Chemring [which] is facing a potential cash crisis after receiving over £50m in excess placing for an acquisition never completed in 2011. While we saw the Carlyle approach as a potential positive catalyst for change within the group, the issues are larger and worse than we expected. Hence we are placing our recommendation under review until we have greater insight into the issues within the company

Already up on my re-purchase yesterday. Speculative but which company in take over mode isnt.

Interesting to note 3 or 4 brokers yesterday re-iterated their previous positions on the stock.

ADD NOTE out from these guys. Sure they were sceptical last week......

29 Aug Chemring Group PLC CHG Oriel Securities Add 330.90 324.00 450.00 440.00 Retains

Four days to go to 'Put up or shut up' from Carlyle. Ominously quite.

Nothing, so presumably, by default, CHG is no longer under bid rules?

Extension of deadline under Rule 2.6(c) of the Takeover Code

The Board of Chemring Group PLC ("Chemring" or the "Company") announced on 17 August 2012 that it had received a highly preliminary expression of interest from The Carlyle Group in relation to a possible offer for the Company.

In accordance with Rule 2.6(a) of the Code, The Carlyle Group is required, by not later than 5.00 p.m. on 14 September 2012, to either announce a firm intention to make an offer for Chemring in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer.

At the request of the Company, the Panel has consented to an extension of this deadline until 5.00 p.m. on 12 October 2012, to enable the parties to continue their on-going discussions regarding a possible offer for the Company. There is no certainty that, at the end of this period, an offer for Chemring will be made, nor as to the terms of any such offer (if made).

Extension of deadline under Rule 2.6(c)

Further to the announcement by Chemring Group PLC ("Chemring" or the "Company") on 14 September 2012 and in accordance with Rule 2.6(a) of the Code, The Carlyle Group is required, by not later than 5.00 p.m. on 12 October 2012, to either announce a firm intention to make an offer for Chemring in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer.

At the request of the Company, the Panel has consented to an extension of this deadline until 5.00 p.m. on 9 November 2012, to enable the parties to continue their on-going discussions regarding a possible offer for the Company. There is no certainty that, at the end of this period, an offer for Chemring will be made, nor as to the terms of any such offer (if made). This extended deadline may be extended further with the consent of the Panel, at Chemring's request, in accordance with Rule 2.6(c) of the Code.

Great, so the deadline can be extended ad infinitum, which makes a mockery of the deadline rule. Yet another month to wait while the accountants, advisors and corporate meetings cream the expense accounts of the two companies. Would at least be polite to inform investors as to why the process is taking so long.

StockMarketWire.com
Chemring Group has appointed Mark Papworth as chief executive with effect from 5 November.

He will replace Dr David Price, who has resigned with immediate effect.

Papworth formerly worked at Wood Group, a leading FTSE 100 company, where he served as CEO of the gas turbines services division from 2005 and also as an executive director on the Board from 2006.

His career has covered high technology, service and manufacturing companies serving aerospace, energy and infrastructure markets.