Specialist electronics-maker Ultra Electronics increased underlying pre-tax profits 18 per cent to £51.4m once you strip out finance income which heavily distorted last year's numbers. With up to 60 per cent of sales covered for next year and an order book up 8 per cent to £832m, Ultra has so far seen little headwind from tightened defence budgets.
Most of Ultra's big contract wins - Netherlands Navy sonar, US Army tactical radios - were achieved by its tactical and sonar systems segment, which saw sales increase by 10 per cent to £155m and operating profit up 26 per cent to £27.5m. Chief executive Douglas Caster said that most of the company's investment is being focused on reducing the proportion of sales tied to UK defence spending, which currently accounts for around 12 per cent of revenues.
In the first half, delayed contracts for the British army's new scout vehicle and the Eurofighter affected the aircraft & land systems division, which meant divisional sales were nearly 9 per cent lower at £76.5m, and operating profit 17 per cent down at £9.1m
Broker Investec Securities anticipates a single-digit upgrade in its earnings forecasts for 2010, which would give EPS of 108-109p (2009: 96.2p).
ULTRA ELECTRONICS (ULE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,634p | MARKET VALUE: | £1.12bn | |
| TOUCH: | 1,626-1,636p | 12-MONTH HIGH: | 1,681p | LOW: 1,150p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 298p* | NET DEBT: | 9% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 325 | 63.0 | 67.7 | 9.6 |
| 2010 | 351 | 35.7 | 38.0 | 10.6 |
| % change | +8 | -43 | -44 | +10 |
Ex-div: 18 Aug Payment: 24 Sep *Includes intangible assets of £302m, or 440p a share | ||||
