Ultra profits rise on growth strategy

DEFENCE supplier Ultra Electronics has seen increases in full-year revenue and pre-tax profits despite concerns about budget cuts hitting its principal markets.

The company, which has operations in Birmingham and Staffordshire, saw revenue increase 9% on 2009 to £710m, while pre-tax profits rose 15% to £102m.

Ultra said it strategies for growth, both organic and through acquisition, had proven successful and this would be the model moving ahead.

Douglas Caster, chief executive, said: “The results for 2010 underline the success of Ultra’s strategies in delivering sustainable, long-term growth. The group continues to invest, both internally and externally, in extending its portfolio of differentiated products and services which are positioned on an increasing number of international platforms and programmes in the defence, security, transport and energy markets.

“This broad range of positions gives resilience to the business model that drives Ultra’s performance, despite market fluctuations.

“The self-funded acquisitions made by the group in 2010 and since the year end have differentiated positions in growing market sectors and are an excellent fit for the group.”

The difficulties facing the Aircraft and Vehicle Systems were evident as revenue dropped 3% and the group’s order book shows on a negligible increase of 0.3% – £210.9m compared with £210.3m in 2009.

Reduced spending on the Boeing 787 and F-35 Joint Strike Fighter projects were partly to blame for this position. Nevertheless, headline operating profit increased by 4% to £23.4m.

The picture was better in the group’s other main operations – Information and Power Systems and Tactical and Sonar Systems. The former showed a revenue increase of 15.8%; the latter 12.4%.

Looking ahead, it said market conditions would continue to be difficult but it was confident of growth.

“Many countries worldwide are addressing the issues caused by high budget deficits and this is exerting pressure on government spending plans. Overall, however, budgets addressable by Ultra remain sufficiently large to give the group headroom for further growth,” it said in its results statement.

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