DEFENCE supplier Ultra Electronics has seen an 18% increase in its interim pre-tax profits based on an 8% increase in group revenue with strengthening orders across most of its divisions.
The group, which has operations in Birmingham and Staffordshire, did, however, see a 4% fall in interim orders for its Aircraft &Vehicle Systems division.
Group revenue rose in the six months to July 2 to £350.9m, which compares with £325.5m in the same period last year. Headline pre-tax profits rose to £47.6m, compared to £40.3m last year.
Douglas Caster, chief executive, said: “The results for the period emphasise the success of Ultra’s strategies to underpin sustainable, long-term growth. Ultra continues to invest in a portfolio of differentiated products and services which are positioned on a large number of international platforms and programmes in the defence, security, transport and energy markets.”
He said the broad range of positions had created a flywheel effect that had driven performance year after year and provided resilience against market fluctuations.
“Ultra has focused on high growth sectors within its markets. The group has an extensive portfolio of offerings positioned on long-term new build and upgrade programmes. Ultra has a broad customer base and accesses a wide range of markets, with international sales now representing three quarters of Group revenue.
“These factors provide Ultra with a resilient business model that underpins future order intake and supports its progress in 2010 and beyond,” he added.
In 2010 the group has continued to invest in the Boeing 787, F-35 Joint Strike Fighter, Airbus A400M and Gulfstream G650 aircraft programmes which will all contribute to growth in the medium and long term. The group also invested in developing the next generation of battlespace communications equipment. Ultra’s internal investment in the period in new product and business development to drive future growth totalled £18m, similar to the same period of 2009 (£18.9m).
Since the end of the period Ultra has made two bolt-in acquisitions; Extec and Birmingham-based Transmag and each for around £3m.
Transmag Power Transformers supplies large, specialist electrical transformers for various applications in the rail, mining and renewable energy markets. Transmag augments the transit power system offering of Ultra’s PMES business in the group’s Information & Power Systems division. It will operate as part of PMES, which has a base in Rugeley.
Extec Integrated Systems, based in Portchester, near Fareham, Hants, designs and manufactures thick-film hybrid electronic microcircuits. It will operate as part of the group’s Manufacturing & Card Systems business in the Aircraft & Vehicle Systems division.
Revenue in Aircraft & Vehicle Systems was £76.5m compared to £83.7m in 2009 and headline operating profit reduced by 17% to £9.1m (2009: £10.9m). The division’s order book reduced by 4% in the period to £204.8m (2009: £213.3m) reflecting delayed contract awards for FRES and Warrior equipment together with the trading of multi-year Eurofighter aircraft equipment contracts.
The division continues to focus on investing in new programmes, principally ice protection systems for the Boeing 787 and F-35 Joint Strike Fighter; the production phases of these programmes will drive growth in the medium and long term.
Revenue in Information & Power Systems grew by 18% to £119.5m compared to £101m in 2009. Headline operating profit increased by 29% to £14.8m (2009: £11.5m) as operating margin recovered to 12.4% (2009: 11.4%).
Revenue and profit growth reflected strong demand for Ultra’s specialist intelligence and surveillance systems, including those for air defence and for systems to protect the British Army’s deployed operating bases. In the transport sector, good demand for IT systems at various airports around the world was matched by that for specialist power equipment for mass transit systems and naval ships.
