Profits up at Ultra as group looks to civil markets for growth
DEFENCE supplier Ultra Electronics has seen a 10% improvement in interim pre-tax profit despite a fall in revenue due largely to currency fluctuations.
The company, which has operations in Birmingham and Rugeley, saw revenue for the six months to July 1 decline 2% from £350.9m this time last year to £343.5m. Pre-tax profit rose from £47.6m to £52.1m over the period. Earnings per share rose 9% from 50p to 54.6p.
Rakesh Sharma, group chief executive, said: “The results for the period reflect the success of Ultra’s strategies to underpin sustainable, long-term growth of shareholder value. Even in a year of difficult market conditions, Ultra continues to reinvest in its portfolio of differentiated products and services.
“These are positioned on a large number of international platforms and programmes in the defence, security, transport and energy markets. This broad range of positions maintains the momentum of Ultra’s performance, despite market fluctuations.”
He said Ultra had a broad customer base worldwide, with international sales now representing about three quarters of group revenue.
The group said it saw significant potential for growth in civil markets, as evidenced by its £207m contract win to supply airport systems integration in Oman.
“For different reasons Ultra’s main defence markets in the US and UK have experienced spending constraints that have deferred order intake,” added Mr Sharma.
“Despite this the group has achieved underlying organic revenue growth although this has been at a lower rate than in recent years. In the same period the group’s operating margin has improved. Ultra’s strategies for growth provide the group with a resilient business model that underpins its performance in 2011 and beyond.”
Across the group there is a mix of businesses with firm orders as well as annual contracts. Overall, the value of Ultra’s order book has grown to more than £1bn for the first time.
