Automotive disruption fails to put the brakes on Ricardo
Engineering consultancy Ricardo has reported a 6% growth in full year revenue, backed by a strong intake of orders.
The group, which has a large technical operation in Leamington Spa, has also announced a record order book with business worth almost £250m.
The performance was even more significant because the group reported a disrupted flow of orders across arguably its best-known sector, automotive.
However, in an indication of which direction the automotive market may be going, the group said its hybrid/electric vehicle (EV) business had seen a 17% growth in orders.
The disruption to automotive was offset by good performances from its energy & environment, rail and performance product divisions.
It has reassured shareholders that the outlook remains positive, with the group enjoying a strong platform for growth.
For the year ended June 2017, total group revenues increased to £352.1m (2016: £332.4m)., a rise of 6%. Underlying pre-tax profit increased 2% to £38.3m (2016: £37.7m), with the margin reducing slightly to 10.9% from 11.3% in the prior year. Using exchange rates consistent with the prior year, revenue and underlying pre-tax profit would have been £336.9m and £38.2m, respectively, both of which represent growth of 1% on the prior year.
The financial year ended with a record order book of £248m (2016: £231m), an increase of 7%.
“The closing order book, together with a very good pipeline of further opportunities, continues to represent a diversified spread of orders across market sectors, customers and geographies,” it said in its results statement.
Reported pre-tax profit decreased by 2% to £32.2m (2016: £33.0m). This is largely as a result of a £0.6m increase in the amortisation charge on acquired intangible assets, reorganisation costs of £0.4m and a £0.7m increase in net interest payable on borrowings, together with a net reduction in income from claims under the Research & Development Expenditure Credit scheme of £0.3m.
This was partially offset by a £1.1m decrease in net acquisition-related expenditure and an increase of £0.1m in the profit generated from acquisitions on a like-for-like basis with the prior year.
The results include the acquisition completed during the year of Motorcycle Engineering Italia, which was formed from the operating assets and employees of Exnovo, a design house for global motorcycle and scooter brands. This business was subsequently renamed Ricardo Motorcycle Italia.
Dave Shemmans, CEO, said: “Based on the foundation of a diversified strategy and an increasingly balanced business, we have navigated an uncertain and volatile year, providing a satisfactory result overall.”