25th Feb 2020 09:18
(Alliance News) - Ricardo PLC on Tuesday said it has delivered "good" performance in the first half of its current financial year, but it expects this to worsen in the second half as the coronavirus outbreak has already started to hinder operations.
The stock was 14% lower in London on Tuesday morning at 649.99 pence a share.
The Shoreham-by-Sea, England-based engineering company reported pretax profit of GBP8.3 million for the six months to the end of 2019 compared to GBP10.3 million a year earlier, as administrative expenses grew to GBP56.5 million from GBP53.1 million.
Revenue, meanwhile, improved by 3% to GBP192.9 million from GBP188.1 million year-on-year amid growth in order intake to GBP208.6 million from GBP201.9 million.
"Overall, the group has achieved a good set of results in the first half of the year, which is in line with our expectations," said Chief Executive Dave Shemmans.
Ricardo declared a dividend of 6.24p a share, up 4% from interim payout of 6.00p paid the year before.
Looking ahead, Shemmans said: "As we start the second half of the year, we have seen increased headwinds in the automotive sector which we anticipate will lead to suppressed order intake in our US, Europe, the Middle East and Africa, and China Automotive businesses."
Ricardo said it is already experiencing an operational disruptions amid the coronavirus outbreak at the start of the second half of its current financial year. The virus is hurting the company's Automotive and Rail operations in China and it said it anticipates "continuing disruption to client engagement", project delivery and business development in the coming months in mainland China and surrounding countries.
Shemmans concluded: "Based on the issues highlighted above we are anticipating material impact to our forecast second half profits and thus full year."
By Evelina Grecenko; [email protected]
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