Defence Firm Says Death Could Hit Profits

13 August 2018, 18:17 | Updated: 13 August 2018, 18:20


Chemring has confirmed that it could take a £20 million hit after one employee died and another was hurt in an accident at its site near Salisbury on Friday.

The defence firm said one worker was killed and another "badly" injured at its flare manufacturing building at its Chemring Countermeasures facility.

Full year underlying operating profit is likely to be around £10 million to £20 million lower than previously expected as a result of the accident, with a "corresponding impact on the group's operating cash flow and net debt".

Deliveries from the factory to customers in the final quarter of the year were previously expected to be £25 million and generate £15 million.

Chemring shares tumbled more than 20% in morning trade to 189p.

The incident also damaged some equipment and production is now temporarily halted, the military equipment group added.

Chemring has started an investigation into the accident, as well as the potential financial ramifications.

The firm said: "A full and immediate investigation into the cause of the incident has been launched in co-operation with the local regulatory authorities.

"The impact on our 2018 and 2019 financial years cannot be accurately quantified at this stage as it will be dependent on insurance recoveries, the timeline for the investigation to be completed and the site to re-open, remediation work to be completed and at what rate production resumes."

The deceased was a 29-year-old man from Southampton, Wiltshire Police confirmed over the weekend.

Authorities said the victim's family have been informed.

The second man caught up in the explosion, a 26-year-old from Pewsey, was in a serious but stable condition in Salisbury District Hospital.

Wiltshire Police said it was investigating the explosion with health and safety officers, and reassured the public that they faced no further risk.