Chemring shares have jumped 12.3 per cent this morning, their biggest rise in more than three years after the UK defence specialist said it has finally commenced a crucial contract, the delay of which contributed to a profit warning last year.
Chemring said this morning that the “40mm ammunition contract to an end user in the Middle East” has begun and advance payment has been received.
The shares have now rebounded 23 per cent from the decade low they hit in February to a two-month high of 145 pence, although they are still down 77 per cent from 2011. The shares have not risen so much in one day since August 2012.
The company has been struggling for several years amid sharp cut backs on defence spending by western governments and a heavy debt load accumulated during an acquisition spree.
Between March 2003, roughly the start of the Iraq war, and March 2011, the company’s share price rose more than tenfold, climbing 1169 per cent. But since then it has fallen by more than two thirds.
There’s more on the Middle East ammunition contract here.