Strong automotive demand drives up profits at Ricardo
ENGINEERING consultancy Ricardo has seen a strong year, helped by good demand from the automotive sector.
The company, which has an automotive operation in Leamington, said the passenger car sector remained the most significant market for the business.
In its latest full year results, the company revealed revenue had risen 9% to £258m (2014: £236m) with underlying pre-tax profit rising at the same rate to £26.8m (2014: £24.6m). It also has an order book at £140m, relatively the same as 2014 (£142m).
It has proposed a 9% rise in full year dividend to 16.6p per share (2014: 15.2p).
“The passenger car sector remains the most significant for Ricardo. Projects continue to be driven by emissions legislation, CO2 reduction and global competition,” said in its results statement.
“During the year demand remained high, with large multi-year contract orders from automakers and suppliers in the UK, EU and Asia. New orders were secured across the vehicle systems and core powertrain areas of our business, focused on both new products and upgrades to existing products.”
It said one of the key drivers of the strong demand was the requirement to deliver lower CO2 solutions at lower cost while maintaining high levels of functional performance. This is driving increased interest in the company’s vehicle lightweighting, advanced combustion and intelligent vehicle and driveline technologies.
Autonomous vehicle technology (for which Midlands-based consultancy HORIBA MIRA is developing a new UK cluster) in particular is attracting significant interest in North America. Interest in hybrid and electric vehicle architectures, battery pack and battery management system design and vehicle attribute development also feature strongly.
The company said demand for engines from McLaren for its supercars continued, and Ricardo was now supplying power units for the new 650S and the highly sophisticated P1 hybrid models. The McLaren engine assembly facility is currently being expanded to enable the firm to satisfy McLaren’s product expansion plans.
Production of the Porsche Cup and advanced dual clutch transmissions to Bugatti also continued in line with the long-term supply agreements.
In the motorsport sector, Ricardo had a busy year with manufacturing orders from Formula 1 customers, and products such as its own designed transmissions for the Japanese Super Formula, Indy Lights and World Series by Renault. Work has also been ongoing to design and manufacture a GT3 racing transmission for two new premium clients.
Looking ahead, it said market conditions remained positive in the UK and Asia, with a good pipeline of defence vehicle activity in the US and recent secured wins in the motorcycle sector in Germany.
“We enter the new financial year with a good order book and pipeline across the group, together with large, long-term assembly contracts and the addition of four new businesses, which all provide confidence in the further development of the group,” said CEO Dave Shemmans.
“As we celebrate our centenary year, our order book and financial position provide a good platform for future growth and we continue to actively look for opportunities to expand and enhance our business.”
