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McMurdo sold to Signature Industries

01 Jan 2007

Chemring Group PLC has agreed a conditional sale of its McMurdo electronics business to Signature Industries Limited, manufacturers of the SARBE Emergency Location Beacons.

Completion, which is conditional upon the transfer of certain product approvals, is expected to take place in the first quarter of 2007.

Following receipt of a cash deposit of £0.25m, £2.8m will be paid in cash at completion and deferred contingent consideration of up to £1.5m will be paid in December 2007. Chemring will retain approximately £1.0m net of trade debtors and creditors relating to McMurdo, which will be collected in due.

In the year to October 31, 2005, McMurdo made an audited operating loss, before restructuring costs, of £1.3m on sales of £6.5m. The gross assets of McMurdo at October 31, 2005 were £8.0m. The loss on disposal, before accounting for deferred contingent consideration, is in the region of £3.9m. The deferred contingent consideration, which is based on prospective sales for the year to October 31, 2007, will be accounted for when the cash is received. 

'This sale completes the Chemring plc strategy of disposal of their electronics businesses,' said MD Robert Hill.

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