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Chemring (CHG) – Finals PTP: £49.8m (£31.8m) Divi: 17.8p (11.2p)

The specialist defence manufacturer, which makes widely used anti-missile decoys, posted a 57% increase in full year taxable profits from continuing operations to £49.8 million, and the total dividend was raised 56% to 25p a share. With conflict still raging in Iraq and Afghanistan, Chemring has a record order book of £401 million. The countermeasures division has a vast market share so the focus is now on the energetics division, which makes ammunitions, and the board will put up to £100 million towards M&A to boost this division. Chemring’s shares fell 12% since November to £19.95, but analyst Chris Dyett at Investec has a £24.50 target price. He points out the little exposure of the firm to the credit crunch.

Shares says: With both organic and acquisitive growth opportunities, and a reasonable valuation, Chemring is a safe bet.

by: Carlo Svaluto