THE employer of a Southampton man who died in an explosion at a military hardware factory says it could take a £20 million hit following the incident.

Police confirmed over the weekend that a 29-year-old man died after an accident at Chemring Countermeasures flare manufacturing building, near Salisbury, on Friday.

Officers say the man died at the scene, while another man was seriously hurt in the explosion.

Now the defence firm says its underlying operating profit for its financial year ending October is likely to be around £10 million to £20 million lower than previously expected as a result of the accident.

The incident also damaged some equipment and production is now temporarily halted, the military equipment group said.

Chemring has started an investigation into the accident as well as the potential financial ramifications.

The firm said: "A full and immediate investigation into the cause of the incident has been launched in co-operation with the local regulatory authorities.

"The impact on our 2018 and 2019 financial years cannot be accurately quantified at this stage as it will be dependent on insurance recoveries, the timeline for the investigation to be completed and the site to reopen, remediation work to be completed and at what rate production resumes."

Chemring shares tumbled more than 20 per cent in morning trade to 189p.

The news follows confirmation from Wiltshire Police of the death of a man in the incident.

A spokesperson for the force said: "We can confirm that the man who sadly died following an explosion at a factory near Salisbury is a 29-year-old man from Southampton.

"Police, ambulance and fire crews were called to the Chemring Plant on High Post Road, Netton, just after 5pm yesterday (August 10) following a report of an explosion at the site.

"Six fire crews were in attendance, with two appliances from Salisbury, as well as appliances from Andover, Fordingbridge, Pewsey and Cranborne, supported by an incident command vehicle from Devizes.

"One man was pronounced deceased at the scene.

"His family have been informed and are being supported by specialist trained family liaison officers. Formal identification, however, has not yet taken place.

"Our thoughts remain with the man's family, friends and colleagues at this extremely sad time and we would ask that you respect their privacy.

"A second man, aged 26, from Pewsey, was taken to Salisbury District Hospital in a serious condition

"His condition remains serious but stable and he is receiving specialist care."

An investigation has been launched into the cause of the incident by the police and the Health and Safety Executive.

Chemring’s business director, Andy Hogben, said in a statement: "Chemring Group PLC confirms that at approximately 5pm on Friday August 10 an incident occurred in a flare manufacturing building at the Chemring Countermeasures factory near Salisbury.

"There has been one fatality and one employee is currently receiving treatment in hospital.

"The site was immediately evacuated and the incident brought under control. The emergency services are in attendance.

"Chemring has launched an investigation into the cause of the incident. The thoughts and support of Chemring Group are with the families at this time."

According to their website, Chemring is a 'global business providing a range of advanced technology products and services to the aerospace, defence and security markets'.