Chemring detects more trouble ahead

Grenade maker and bomb detector group Chemring has warned that slashed defence spending in the US, Europe and UK means next year will be “challenging” after an “extremely disappointing” 2012.

In a trading update today, just three weeks after the collapse of buyout talks with US private-equity giant Carlyle, Chemring conceded “that operational performance has been weak, and management of investors’ expectations over the past year has also been poor”.

The frank admissions come the same month that Mark Papworth, who previously led the turnaround of a division of oil services company Wood Group, joined as chief executive.

Papworth faces a tough job convincing investors his review of the business, to be unveiled alongside full-year results in January, will transform Chemring’s fortunes: investors are reported to have privately described the company as “a total mess”.