Ricardo order books ahead of last year

AUTOMOTIVE and engineering consultancy Ricardo said today that its order book remained ahead of the same point last year although customers were still cautious about the future.

The company, which has a major technical centre in Leamington Spa, said orders at the end of April were £87m, which compares with £84m in the corresponding period last year.

However, the fluctuating nature of the recovery is reflected by that fact that by December 31, 2009 the order pipeline stood at £99m.

In an interim management statement covering the period from January 1, Ricardo said: “Markets have continued to reflect the underlying weakness of economic recovery. Many customers remain cautious and some projects are taking longer to close than expected.  

“This has particularly affected the UK activities, which rely on customers in Eastern Europe and Asia.”

“We continue to make good progress in North America and in Germany, where our business is developing steadily. Overall, the pipeline remains strong with some traditional customers returning to discuss opportunities,” it added.
 
Order intake for the four months to April was 11% higher than last year, although the company said this was still subdued.

It said that since the start of the year it had received significant orders from several Chinese car makers, while in the UK, the Ministry of Defence was also using the firm.

The US Department of Defence and the US automotive industry have also placed orders with the firm as have a number of German commercial vehicle manufacturers.

However, Ricardo said that due to prolonged negotiation periods and client decision-making, these orders had often come in later than originally anticipated.  This delay is likely to limit revenue in the fourth quarter.
 
The company said negotiations were in progress with a number of potential purchasers of its German exhaust business. An announcement on the sale is expected by the time the firm publishes its preliminary results.

It said its balance sheet remained strong with no significant change in its financial position since the publication of its half-year results.

In outlook, it said: “Markets remain uncertain and have still not returned to normality. Current levels of activity are similar to those experienced in the second half of the last financial year.

“The board believes that the strategy of market and geographic growth allied with tight on-going cost control and continuing investment in R&D and infrastructure projects, has positioned the group well to weather current market weakness and to take advantage of the expected recovery next year.”
 
The company announces its full results to June 30 in September.