CHG (Chemring) is a Defence company, making stuff that kills people. It has had impressive earnings growth over the last decade. It is on my radar, if you’ll forgive the pun, on acccount of a takeover approach earlier this year. Shares went as low as nearly 260p earlier this year, and soared past 400p on news of the approach. The possible offer is from The Carlyle Group, and they have until 5pm 14 Sep to announce either way if they have a firm intention to make an offer.
CHG issued an IMS today. Revenues have increased. However, the company warned of the discovery of errors in a new ERP (Enterprise Resource Planning) system being installed in Florida, and delays in production of an Anti-Personnel Obstacle Breaching System (sounds painful). Their order book is 9% lower than last year, license approvals are taking longer to obtain, and the US defence market has a lot of funding uncertainty. This has sent shares plummeting (dive-bombing?) 12% to 325.8p at the time of writing.
Things should get really interesting if an offer is not made.