Ultra looks to cost control as US procurement process delays kick in

DEFENCE supplier Ultra says it is seeing encouraging demand for its products and services but has again warned of a reduction in revenues as a result of changes to the US Government procurement process.

The firm, which has operations in Birmingham and Staffordshire, said it is continuing to focus on robust cost control, efficient programme delivery and restructuring of the portfolio to adapt to market conditions.

In an interim management statement for the period 1 July to 18 November, Ultra said order intake has been good and it has seen encouraging demand for its specialist capabilities.

“As we had anticipated, in the US defence market a continuing resolution in relation to Government appropriations came into effect at the beginning of October,” it said.

“As previously indicated this will result in delays to orders leading to some reduction in 2014 revenues. Revenues have been further impacted by softness in US Government defence expenditure in the month of September.”
 
Ultra said recent acquisitions are performing well and will make a greater contribution to full year profit than previously expected.
 
“Since August the group has made progress with its customer in relation to the extension of time and cost for the Oman Airport IT contract,” it said.

“While risk remains, confidence is improving that we can work together to a satisfactory solution to this situation as we continue negotiations with our customer.

Ultra said its balance sheet remains strong.