One of the UK's biggest defence firms has warned of a £15 million hit to profits after a deal to help the US military with landmine clearance became its latest contract to suffer delay.
Chemring said the equipment, which fires lines charged with grenades in the air in order to trigger improvised explosive devices, had been put back to the final quarter of 2012 due to problems with a supplier.
The setback on the £100 million contract is the latest blow for the Hampshire-based firm, which recently posted lower half-year profits after a delay to a £370 million contract at its mine detection subsidiary.
Shares fell 13% on Tuesday, wiping £80 million from its value, after it said its order book was 9% lower, partly as a result of the impact of the early start to Ramadan on trade with the Middle East.
The company, which makes decoys for military aircraft and ejector seats, has now seen its share price halve in just over a year as Western nations tighten military spending, causing orders to be delayed.
Production of the kit to clear improvised explosive devices for the US military, worth 150 million US dollars (£94.9 million) over the next four years, had been due to start last month.
With the company also being hit by a delay implementing a new IT management system at its Florida unit, it said operating profits for the year to October would come in £15 million lower than expected.
It is the latest in a series of disappointing updates from Chemring, which earlier this month said it had received a preliminary expression of interest from private equity group Carlyle.
David Buxton, an analyst at FinnCap, reduced his pre-tax profits forecast for the year to the end of October by £15 million to £119.1 million.
The group, which employs 4,000 people and is best known for developing missile-avoidance equipment used in the Joint Strike Fighter, saw revenues increase 4% to £165 million in the three months to the end of July but analysts continued to be worried by the fall in orders.