Chemring ditches chief executive for former soldier

Defence group Chemring has ditched its chief executive after less than two years at the controls and appointed a military expert to pilot the business in a world of falling arms spending by governments.

The company’s shares dropped as much as 7pc in early trading as it simultaneously revealed a management shake-up and disappointing half-year results.

Chief executive Mark Papworth stepped down with immediate effect and has been replaced by ex-soldier Michael Flowers, who was previously director of Chemring’s countermeasures business.

Peter Hickson, chairman of Chemring, said: “Michael Flowers has a proven track record, both within the international defence industry and within Chemring, where he led our Australian business through a successful period of growth and managed the complex disposal process of the European munitions business.

“Michael is extremely knowledgeable about our markets and is well qualified to lead Chemring as we capitalise on our world-leading technologies in countermeasures, sensors & electronics and energetic systems.”

Mr Flowers spent 22 years in the Australian Army and later worked for BAE Systems. In 2006 he joined Chemring, whose products include decoy chaff and flares, military sensors, propellants and explosives.

Mr Papworth was appointed in October 2012 from oil services company Wood Group where he was expected to secure the Chemring’s future after a mooted takeover bid failed to materialise.

In a statement, Chemring, which was demoted out of the FTSE 250 in December, said “much has been achieved during by Mr Papworth’s tenure” including reorganisation and cost cuts.

The company added: “We are now moving from a period of critical and significant change to one where we must take maximum advantage of the stronger platform that has been created.

“To achieve this, a different set of skills is required in the role of chief executive, in particular extensive knowledge and understanding of the defence markets in which we operate.”

In the six months to April 30, Chemring’s revenue fell 6pc to £297.4m and pre-tax losses grew from £3.4m during the same period last year to £72.5m.

On an underlying basis, which adjusts for factors including the £134.5m Chemring received for the sale of its European munitions business to Nexter, the underlying pre-tax profit net of debt fell by 30pc to £18m.

In the results Mr Hickson warned that “end markets remain challenging and customer behaviour difficult to predict” but the company was looking for opportunities outside NATO countries and non-defence work.

Analysts were broadly supportive of the changes to management, pointing to Mr Flowers' as an industry rather than operational specialist, with the contacts to win business in an difficult market.

Harry Breach, analyst at Westhouse Securities, noted Mr Papworth's "abrupt" departure, adding that "there is little language about [his] departure save for the chairman's expression of gratitude for his leadership" but said the results were slightly better than he had expected.