Chemring targets boost from Bush spend

BRITISH defence firm Chemring is confident of extra business on the back of the latest plans under the Bush administration to up America's military spend to about $500bn (£269bn) this year.

A growing threat to US and UK military aircraft from hand-held rocket-launchers is already boosting sales for Chemring, a niche firm that produces decoy flares to ward off missile attacks.

Bush wants to increase the defence budget by 4.8% this year and has separate authorisation for a £100bn spend on Iraq. Chemring chief executive David Evans said: 'That will be appreciated in the next month or so and we will benefit.'

Chemring, whose shares today rose 21½p to 433p, makes 47% of its sales to the US. Its forward order book rose to £102m on 31 October from £87m the year before. Evans said he is close to securing another $20m of contracts in the US.

He added that the firm is also trialling its countermeasure systems for use on Boeing 737s with the US military.

'There is a growing awareness in Nato countries that shoulder-held launchers are proliferating to all sorts of shady organisations. This is driving demand for increasing protection on helicopters and transport aircraft,' Evans said.

Full-year pre-tax profits from continuing operations rose 22% to £14m. Chemring could spend up to $100m on acquisitions.