Ultra, the international defence, security, transport and energy group, today issues a post-close trading statement in respect of its year ended 31 December 2017.
2017 Performance
Group trading remains in line with the announcement made on 10 November 2017. Full year revenue is expected to be over £770m and underlying operating profit just over £120m. Cash conversion is expected above 90% and follows the cash conversion of 92% for the year ended 31 December 2016. Order intake has continued to be strong at around £900m. The Board remains minded to recommend a final dividend of 35p per share and will finalise this when the Group announces its full year results.
2018 Outlook
The Group enters the year with an order cover on expected 2018 revenues of around 62%, compared with approximately 56% in 2017. At this early stage of the year, the current expectations for 2018 are:
- Modest progress in underlying revenue and operating profit at constant currencies after investing for the future through increased R&D and capital expenditure.
- Trading performance for each half of 2018 is expected to be approximately 48%:52%.
- Further good cash generation. The medium term guidance for cash conversion remains in line with the 80% to 85% levels mentioned in the announcement of 10 November 2017.
The Group will adopt IFRS 15 with effect from 1 January 2018 and will provide pro-forma 2017 results under IFRS 15 in March. The Group does not expect any material impact arising from this. Ultra also notes the approval of the new US tax legislation and Jobs Act. The Group anticipates that the announced changes will have a minor impact on the Group’s effective tax rate for 2018 and will give further guidance on this in March.
The search for a new Chief Executive is underway and the Group will update the market when appropriate.
Douglas Caster, Executive Chairman commented: “Ultra continues to be a world-leading business with extensive intellectual property, strong market positions, differentiated technologies, talented people and a strong balance sheet. The Group’s core strengths include world-leading positions in many of its specialist capabilities. It has positions on a broad number of long term platforms and programmes, significant exposure to the strengthening US defence budget, and growing demand for advanced defence technologies. The Group also has good visibility through a strong order book of just under £900m which excludes contributions from a large volume of IDIQs (US DoD indefinite delivery indefinite quantity contracts) and other off order book aerospace contracts. The Board is confident that Ultra has sustainable operating trading momentum with a significant number of recent long-term contract wins.”
Ultra's results announcement for the year ended 31 December 2017 is scheduled for 5 March 2018.
Enquiries:
Ultra Electronics Holdings PLC
Douglas Caster, Executive Chairman
+44 20 8813 4300
Amitabh Sharma, Group Finance Director
Susan McErlain, Corporate Affairs Director
+44 7836 522 722 MHP
Communications
James White
+44 20 3128 8756
The person responsible for arranging the release of this announcement on behalf of the company is Amitabh Sharma, Group Finance Director.