Strong global spead helps Ricardo to 41% profits increase
ENGINEERING consultancy Ricardo is continuing to benefit from the strong automotive sector although markets in the United States are in a state of flux as the industry there undergoes something of a transformation.
The consultancy, which has several operations across the Midlands looking at both the rail and automotive sectors, said its order books were very strong despite the sluggish markets in the US where work from traditional customers in former manufacturing powerhouses like Chicago and Detroit is drying up.
Instead, group CEO Dave Shemmans said the company was looking to shift focus to new opportunities in California and Nevada where it is working with companies in the electric vehicle sector.
He said one company, Faraday Future was particularly interesting because of its growth strategy.
The company is developing a new plant in the Nevada desert where it will produce next generation electric vehicles but the company, which is backed by investment from Chinese technology entrepreneurs, is looking to go a stage further by fitting out the vehicles with in-car connected entertainment systems that effectively renders them tablets on wheels.
But this is just one focus for the business.
New acquisitions in the rail sector are helping to drive growth in Europe and China, while Ricardo is also looking at developing its expertise in water management as it spies further opportunities in the year ahead.
Strategies are to build long-term, multi-year contracts and relationships. This is evidenced by the further expansion of the McLaren engine assembly line, a high-profile transmission supply contract and through multi-year projects secured within the Environmental and Technical Consulting parts of the business.
The group’s year-end order book stands at a record high – £231m (2015: £140m) – and, in combination with the group’s financial position, offers it a strong platform for growth.
Mr Shemmans said: “This year we have extended our capabilities into rail and water consulting through the acquisitions of LR Rail and Cascade, and expanded our capability in the urban mobility market through the acquisition of the Exnovo business after the year-end.
“We have stepped up our investment into facilities and research for the development of advanced clean automotive products, and we have supported countries worldwide with their submissions to the global COP21 congress in Paris.
“We are also welcoming additional members to our growing worldwide team of engineers and scientists who are inspired to make that vital difference. We continue to deliver a good set of financial results year-on-year, with revenue and profit growth across a diverse portfolio of clients and projects. Both of the businesses acquired in the year have performed strongly in their first year within the Ricardo Group.”
Group revenues for the year to June 30, 2016 increased by 29% to £332.4m (2015: £257.5m) and underlying pre-tax profit increased by 41% to £37.7m (2015: £26.8m).
