Interim Results for the six months to 1 July 2016

01 AUGUST 2016

FINANCIAL HIGHLIGHTS

 
 
 

Six months to 1st July 2016

Six months to
30 June 2015

Change

 Revenue

£366.6m

£331.7m 

+10.5% 

 Underlying operating profit*(1)

£57.7m 

£50.4m 

+14.5% 

 Underlying profit before tax*(2)

£52.4m

£47.4m  

+10.5%

 IFRS profit before tax

£32.6m

£14.8m

+120.3% 

 Underlying earnings per share(2)

58.1p

52.2p

+11.3%

 Interim divided per share

14.2p

13.8p

+2.9% 

  • First half performance in line with expectations
  • Organic revenue performance improved to -2.5% (2015: -11.9%)
  • Underlying operating margin(1) of 15.7% (2015: 15.2%)
  • Order book of £785.7m, up from £753.8m at start of 2016
  • Cash conversion improved to 67% (2015: 31%)
  • First disposal announced in period after Group portfolio review
  • S3 initiative on track
  • Herley acquisition performing well and integration ahead of schedule   

Rakesh Sharma, Chief Executive, commented:  
“Market conditions have remained largely unchanged since our last preliminary announcement. US defence outlays ended the period close to budget levels but with higher spending in the first quarter compared to the second. The order book has increased over 2016; further, we have been selected for some significant orders in export markets with contract award expected in the second half. Our latest acquisition, Herley, performed well in the period and its integration is ahead of schedule. The proceeds of the recently announced disposal of ID Systems will be used to reduce Group debt. We continue to explore options to further rationalise and improve Ultra’s portfolio. 

As in previous years, performance will be second half weighted and Ultra starts the remainder of the year with an 84% order cover. We expect further market and macro uncertainties. In the US an expected Continuing Resolution would delay new contract awards, while in the UK post-referendum economic factors may delay Government commitment to some major programmes. Nevertheless, the Group continues to capture and execute on a broad range of contracts and programmes and to position itself well for future revenue opportunities. Ultra will continue its focus on robust cost control which will help sustain Group margins while our current investment in S3 will deliver further demonstrable savings from 2018. Taking all these factors into account, the Board is confident that the Group is on track to meet full-year expectations”.

(1)  before Oman contract termination and liquidation related costs, amortisation of intangibles arising on acquisitions, impairment charges, the S3 programme and adjustments to deferred consideration net of acquisition and disposal related costs. IFRS operating profit was £38.8m (2015: £34.0m (restated)). See Note 4 for reconciliation. 

(2) before Oman contract termination and liquidation related costs, amortisation of intangibles arising on acquisitions, impairment charges, the S3 programme, fair value movements on derivatives, unwinding of discount on provisions, defined benefit pension curtailment gain and interest charges and adjustments to deferred consideration net of acquisition and disposal related costs and, in the case of underlying earnings per share, before related taxation. Basic EPS 38.4p (2015: 11.9p). See Note 10 for reconciliation.