A RECOVERY in the passenger car market and good progress with a diversification strategy helped to boost the second half performance of automotive and defence consultancy Ricardo.
In the period to the end of December, the firm saw its order book increase 16% on the first half to £117m. Revenue was up 11% at £90.2m and pre-tax profit rose 32% to £5m, compared to the same period in 2009.
The company, which has a major innovation centre in Leamington Spa, saw net debt of £7.5m by the end of the period, compared with £7.8m for the previous six months.
Basic earnings per share rose to 9.4p and the company has announced an interim dividend of 3.4p per share, up slightly on the 3.2p in the comparable period in 2009.
Looking ahead, the company said the market outlook looked positive both in terms of continued growth in the passenger car market and its diversification strategy.
Commenting on the results, Dave Shemmans, chief executive said: “Overall, this has been a pleasing half year performance with positive signs of recovery in the passenger car market and further progress made with our diversification strategy.
“Strong order intake in the past six months, up 28% on the same period in the prior year, has yielded an order book at a healthy £117m, up 16% compared with June 30, 2010, with a good pipeline of prospects.
“The balance sheet is strong, the operating margins have improved, and profit before tax on continuing operations is up 32% on prior year despite cost overruns on a large engineering design programme, which has now been completed.”
He said orders received in the period reflected an improving confidence in the market and a return of multi-year outsourced development programmes from clients.
“We secured key projects in the automotive and off-highway sectors whilst our defence business benefited from the formal award of the contract to Ricardo by Force Protection Europe for the set up and assembly of 200 UK Ministry of Defence Foxhound vehicles (formerly known as Ocelot), with production commencing in July 2011,” he added.
“Overall, the market outlook is more positive with the return of passenger car customers and opportunities for diversification. We are pleased with both the results for the first half and the growth of the order book and we are confident of further progress for the full year.”
He said winning multi-year engineering programmes, commencing assembly on a supercar engine, and securing a significant defence programme despite sector cutbacks were all positive signs for the business.
