With a record order book in place, Ricardo (RCDO) is rightly looking forward to the second half, when the engineering consultancy typically does almost two-thirds of its business. But it had a strong first half, too. Even when you strip out the £1.3m gain from the AEA acquisition in 2012, pre-tax profit grew 11 per cent to £8m.
Ten per cent revenue growth at the technical consulting division, which includes environmental consultancy AEA, drove underlying operating profit up by almost a fifth to £5.6m. A pair of big motorcycle programmes in Germany and extra work with the big American car manufacturers should help the second half. Ricardo's £143m order book is full of work from Japan and China, too. "There's a lot of scooter activity," says chief executive Dave Shemmans.
Profits at Ricardo's sexy performance products division, which supplies Formula One teams and Bugatti, also rose sharply - up 17 per cent to £4.2m. But McLaren stands out. A new deal signed in December will see Ricardo ramp up capacity to 5,000 engines a year. It already makes them for the 12C and new McLaren P1 supercars, but the launch of a new model in 2016 will double annual revenue from the car manufacturer to £40m a year.
Investec Securities has pencilled in adjusted pre-tax profit of £24.5m for the full year, giving EPS of 38.6p (from £22.7m and 35p in 2013).
RICARDO (RCDO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 799p | MARKET VALUE: | £418m | |
| TOUCH: | 796-799p | 12-MONTH HIGH: | 745p | Low: 365p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 187p* | NET CASH: | £8.2m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 100 | 5.8 | 9.3 | 4 |
| 2013 | 112 | 8.8 | 13.9 | 4.3 |
| % change | +12 | +52 | +49 | +8 |
Ex-div: 5 Mar Payment: 7 Apr *Includes intangible assets of £41m, or 78p a share | ||||
