Ricardo enjoys record profits supported by help from car giants
ENGINEERING consultancy Ricardo has seen record full year revenues and profits in a performance boosted by a buoyant automotive sector and support by customers such as Jaguar Land Rover.
The group, which has a major facility in Leamington Spa, said strong demand in the UIK had helped to offset challenges to its operations in Germany caused by the slump i8n demand across the Eurozone.
For the full year to June 30, 2013, revenue increased to £229.7m, a 16% increase on the previous year. This includes £25.4m from Ricardo-AEA from the point of acquisition in November last year.
Group revenues, excluding Ricardo-AEA, increased by 3% on the 2012, which the group said represented solid growth within the existing business.
Underlying pre-tax profit increased by 31% to £23m, up from £17.6m in 2012 and includes £2.8m from Ricardo-AEA. The group has also delivered margin improvement, with underlying pre-tax margins now at 10%, compared to 8.9% in the previous year.
Underlying basic earnings per share was up 22% to 35.8p, compared with 29.3p in the prior year.
The group’s closing order book stood at £121m, with significant pipeline opportunities. The group continues to invest in research and development, and had expenditure of £9m (2012: £9.5m) before government grant income of £1.2m (2012: £3.4m) and excluding amounts capitalised of £0.7m (2012: £0.5m).
It said the passenger car sector remained one of the most significant for the business. Project demand was strong during the year, with orders from the US, Japan and China as well as in the UK from customers such as Jaguar Land Rover as a result of the on-going strategic supplier relationship. An example of the type of work carried out under this arrangement is the project to integrate the I4 Ti 240 four-cylinder engines into the XJ and XF saloons for the Chinese market.
Dave Shemmans, Ricardo CEO, said: “This year we have delivered record financial results, strong cash generation and exceptional projects to our clients. We are starting 2014 with a solid order book, good order intake in the first two months and a growing pipeline which includes significant opportunities in the passenger car market. With Ricardo-AEA we are demonstrating that carefully targeted acquisitions can significantly accelerate the achievement of our strategic objectives.
“We have continued to make good progress both strategically and operationally in building an innovative and agile group which is well placed to deliver exceptional projects for clients. Our results demonstrate the benefit of our growth and risk mitigation strategy. We anticipate further progress in 2014 as the group has a strong balance sheet and a range of opportunities open to it as a diverse Technical Consulting and Performance Products business.”
