27th Feb 2015 09:00
LONDON (Alliance News) - Ricardo PLC Friday reported a higher pretax profit for the first half of its financial year, as revenue was buoyed by good demand for both its technical consulting services and performance products, and said it remained confident about its prospects for the year as a whole.
The company, which provides technical consulting and performance products to car makers and the wider transport sector, governments, the defence sector and environmental agencies, reported a pretax profit of GBP9.0 million for the six months to end-December, up from GBP8.8 million a year earlier, even though acquisition-related costs more than doubled to GBP1.1 million.
Excluding those costs, its closely-watched underlying operating profit rose to GBP10.6 million, from GBP9.8 million a year earlier, as revenue rose to GBP120.5 million from GBP111.9 million.
It increased its interim dividend to 4.65 pence, from 4.30p a year earlier.
The company bought motorcycle and powersport consultancy Vepro Ltd and energy services consultancy Power Planning Associates Ltd during the half.
Ricardo, which has just entered its centenary year, said revenue rose 6% to GBP90.1 million in its technical consulting business, with underlying operating profit up 23% to GBP6.9 million. Revenue in its performance products business rose 12% to GBP30.4 million, although underlying operating profit fell to GBP3.7 million, from GBP4.2 million a year earlier, due to a change in programme mix that the company had already signalled.
The company's order book stood at GBP138 million at the end of the half, down slightly from GBP142 million at the end of June. However, that excludes an order for about GBP10 million that its technical consulting arm won in January in Asia.
"The second half has started well with strong order intake leading to a record order book of GBP152 million at the end of January. As we look to our second century, we remain confident of further progress in the full year," Chief Executive Dave Shemmans said in a statement.
The company said it was continuing to manage working capital tightly, although it spent GBP8.1 million in capital expenditure, more than double the level of a year earlier, as it expanded its technical centre in Shoreham. It also reported a net cash outflow of GBP1.9 million for the two acquisitions it made in the half. It ended the period with net funds of GBP11.0 million, fown from GBP12.6 million at the end of June.
Ricardo shares were down 0.1% at 720.50 pence early Friday.
By Steve McGrath; [email protected]; @stevemcgrath1
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