No spark yet for Ultra Electronics

Strip out acquisitions and sales fell by 4 per cent, but an ongoing programme of cost-cutting did at least improve margins slightly, leaving underlying operating profit flat at £122m. Most of the damage was done at the information and power systems division, where profit fell 8 per cent to £41.2m. Business elsewhere is more encouraging. Demand for ice-protection systems and a radio contract with the British Army advanced profit at the aircraft & vehicle systems unit by 6 per cent to £32.4m. And the tactical and sonar-systems unit made an extra 4 per cent profit selling submarine warfare kit to the US Navy - part of America’s increasing focus on the perceived naval threat, mostly from China.

Crucially, management expects greater certainty in US defence spending during the second half of 2014. Ultra’s non-defence business should keep growing, too, especially nuclear work for the Chinese and EDF, and with Airbus in civil aerospace.

Broker Investec Securities expects to trim current forecasts for 2014 adjusted EPS of 129p (from 127p in 2013) by 2 per cent.