Defence supplier Ultra sees 12% increase in FY profits
DEFENCE supplier Ultra Electronics has announced a 12% increase in full-year pre-tax profits based on a 3% rise in revenue.
The group, which has operations in Birmingham and Rugeley, said it had been boosted by strong demand for its nuclear sensors and control systems.
Underlying pre-tax profit increased to £114.9m (2010: £102.7m) which reduced to £7.2m (2010: £7.6m) after net financing charges. Revenue was 3% higher at £731.7m (2010: £710m). Four key acquisitions during the year contributed about 5% to the total, however, after exchange rate movements were factored in this reduced revenue by around 2%.
Rakesh Sharma, Ultra chief executive, said: “The results for the year reflect the success of Ultra’s strategies to create sustainable, long-term growth of shareholder value. Customers in Ultra’s main defence markets of the US and UK have, for different reasons, delayed the start of new programmes and only funded existing ones on an incremental basis.
“Despite the headwinds from currency and Ultra’s major activities in the UAE becoming part of an associated undertaking, the group achieved 2% underlying organic revenue growth.”
The group’s operating margin has improved and its operating cash flow remained strong.
“Although market conditions are challenging, the group continues to reinvest in its portfolio of differentiated, specialist capabilities while simultaneously maintaining constant downward pressure on the cost base of each business,” added Mr Sharma.
He said the four acquisitions made by the group had significantly augmented its range of security and cyber activities.
“Ultra’s strategy is constantly to broaden its portfolio of products and services that are positioned on a large number of international platforms and programmes in the defence, security, transport and energy markets.
“Ultra has a broad customer base worldwide, with sales outside the UK now representing about 70% of group revenue. Ultra is strongly cash-generative and has the balance sheet strength to continue its investment in market sectors where customers preferentially focus their spend,” added Mr Sharma.
Despite cuts to defence spending he said new opportunities would arise, especially as the threat of cyber terrorism increased.
“These factors provide the group with a resilient business model that, together with the full year benefit of acquisitions made in 2011, underpin the board’s confidence of continued progress in 2012 and beyond,” he added.
