While the growth prospects at Chemring and Pains-Wessex are limited somewhat by their already considerable presence in their core markets, the group's third arm, Vacuum Reflex, has no such problems. Though small, it plays an important part in the group. Says Billington: "In some areas - marine safety, for example - it gives us total market penetration."
Vacuum Reflex came into the group in 1974 when Chemring acquired a rival radar reflector manufacturer, since absorbed into the Portsmouth site. The clothing part of the business specialised in protective clothing for military, coldstore, dog training and other purposes and counts Iceland, Sainsbury and Tesco among its customers. Last year, in pursuit of growth, the company went into the leisure market. Using an insulation material which provides exceptional warmth from very little bulk, it has produced a range of clothing for horse riding. Hang-gliding and archery wear are to follow.
These prospects will go some way to expand non-defence operations, but Billington is actively looking out for acquisitions and has recently bought Octavius Hunt, which makes smoke pesticides and specialist matches, for £1.5 million. "The aim is to look for well managed companies - financially sound and where the management would stay - operating in manufacturing industries similar to our own: that is, clothing, mixing powders or engineering." (Chemring Ltd has a profitable business in machined components for mineral insulated cable terminations.)
The alternative is companies selling into markets in which the group is active, which would enable it to make use of its worldwide distribution network. With a tiny head office of himself, the business development director and secretarial staff, Billington obviously cannot afford to take on any businesses that are badly run.
The one exception to these rules is waste management. Pains-Wessex already has a business destroying time-expired ammunition, breaking down the chemicals and recycling the hardware, and has rights over a patent to convert sewage into fertiliser. "It's a business we understand in which we are offering an engineering and chemical solution," says Billington. With dumping at sea no longer an option in these areas by the end of the century, he believes that Chemring will be able to play a useful role.
It is high time to spread the risk. Though its specialist technology insulates it somewhat from encroachment, with competition ever tougher, the group will need to keep its wits about it. Three years ago a bid from a major defence group, possibly British Aerospace, was rumoured, and as a sound, cash-generating business, Chemring still looks attractive. Its plans look sensible enough. With a healthy balance sheet, Chemring has the wherewithal. What it needs to do now is to put its plans into action.