Uncertainty in States hits Chemring

Chemring had in January said it expected difficult market conditions to persist in 2013. About $85bn in across-the-board government cuts to both civilian and defence programmes, known as sequestration, kicked in in March after President Barack Obama and Congress failed to agree on a plan to bring down the United States’ budget deficit.

The budget reductions have weighed on military equipment makers such as Chemring and have made it difficult for them to predict exactly how much of an impact the cuts would have on their businesses.

Chemring supplies equipment such as flares and pyrotechnics for ejection seats in aircraft, and minefield breaching systems to the US military.

Europe’s largest defence contractor, BAE Systems, last month left its outlook for the year unchanged.