Defence contractor CHG (Chemring) is a company that been off my radar (no pun intended) for some time now, but caught my attention as one of the market’s biggest fallers today: down nearly 23% to around 219p. It issued a trading update today (http://is.gd/5YLH2W), which, needless to say, wasn’t a good one.
CHG has significant US exposure, so the US government shutdown has obviously had a bad effect which is “not yet known”. Quality and production problems have continued, and there has been an adverse movement in exchange rates. Just when you thought things couldn’t get any worse, CHG notes that recent tensions in the Middle East has constrained shipping, and will have a short term impact on cash receipts.
I noted on June 2013 that the “market dislikes
interims” (http://www.stockopedia.co.uk/content/chemring-market-dislikes-interims-74367/), and that CEO expressed ambivalence to prospects.
The shares fell to around 218p in Nov 2013, when the Carlyle Group abandoned its bid for the company. The shares had reached a high of around 320p since then, but if you hadn’t taken profits then, you would be back to square one as of today.
It’s all a bit of a mess, really.