Ultra Electronics full-year profit, order book plunges

3rd Mar 2014 07:45

- Full-year IFRS profit and orders slump - Challenging US defence market conditions- Increases dividend paymentDefence, security, transport and energy electronics company Ultra Electronics said pre-tax profit, on IFRS basis, slumped nearly 40 per cent as overall uncertainty and delays in the US defence market hit orders. IFRS pre-tax profit fell 38.2% to £49.3m for the year ended December 31st on revenues that slipped 2.1% to £745.2m. The total order book fell 13.7% year-on-year to £781.2m in what it described as a "sustained performance despite challenging US defence market conditions".Underlying earnings per share increased to 127.1p compared to 125.5p last year.Chief Executive Rakesh Sharma commented: "In the US defence market, overall uncertainty and delays rather than budget constraints impacted order placement and payment approvals. In response to these factors Ultra continued to reduce business costs, whilst maintaining its investment internally and in acquisitions."There continue to be a number of larger opportunities for growth alongside the regular flow of smaller orders and we have a healthy acquisition pipeline, as evidenced by the recent acquisition of 3 Phoenix."Looking ahead to 2014, the group said its non-defence sectors are expected to remain positive. The US defence markets will continue to provide challenges but it expects improving certainty and order placement in its niche areas during the second half of the year. Ultra said there continues to be a number of larger opportunities for growth alongside the regular flow of smaller orders and it has a healthy acquisition pipeline. Underlining its confidence in future trading, the group has increased its dividend 5.5% to 42.2p per share.CJ