Engineering group posts strong results despite ‘turbulent’ automotive sector

Engineering group Ricardo has hailed a resilient annual performance as its diversification across sectors and geographies helped combat a ‘turbulent backdrop’ in the automotive sector.

The company, which has a large testing facility in Leamington Spa, saw its order book increase to £314m for the year to the end of June, up £19m on the previous year, while revenue was up 2% to £384.4m.

Underlying profit before tax was similar to prior year at £37m, dipping by £500,000.

The group’s overall order intake reduced by 7% to £386m in the year. It said that in its technical consulting, division, the result reflects a combination of large multi-year programmes won in the prior year, and lower orders in both automotive and rail this year.

In performance products, order intake increased through a combination of growth in McLaren engine volumes and orders for the anti-lock brake and an electronic stability control systems programme for the US Army.

The company said current political and economic uncertainties aside, it is well positioned for growth from a strong, diversified order book and pipeline, recurring revenue from long-term production programmes and the benefit of recent acquisitions, such as its purchase of environment, planning and infrastructure advisory consultancy PLC Consulting, headquartered in Melbourne, Australia for more than £5m.

Dave Shemmans, chief executive, said: “In this financial year, Ricardo managed to deliver an increase in revenue and order book overall, despite a very turbulent backdrop in automotive. This was driven by strong growth in Performance Products and Energy & Environment in particular.

“We successfully expanded in Australia, with the acquisition of Transport Engineering in May 2019 to support our Rail business, and PLC Consulting in July 2019 to broaden our Environmental consulting offering. We continue to invest in technologies, services and digital products to aid our blue-chip clients – together we create sustainable solutions to address the key issues of climate change, air quality, global stability and the management of scarce natural resources.

“We deliver services and products to help build a cleaner, safer and more sustainable world – in essence, creating a world fit for the future. The demand for innovative solutions in the markets and geographies we serve, together with our diverse portfolio of businesses, gives us confidence in Ricardo’s continued success.”

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