28th Jul 2020 12:17
(Alliance News) - Ricardo PLC on Tuesday announced a tough financial year with revenue taking a knock, mainly due to Covid-19, but its diverse portfolio has kept it afloat.
The engineering, environmental and strategic consultancy said in the financial year to June 30 order intake was over GBP365 million, off just GBP1 million to the prior year.
Total group revenue however was down to GBP350 million from GBP384 million last year.
Whilst revenue has been hurt to a degree, profit and margins have suffered further, due to the reduced level of efficiency, Ricardo said.
Underlying annual pretax profit is expected to be about GBP15 million to GBP16 million from GBP37.0 million the year before. The low level of profit was due to lower revenue and reduced efficiency due to order delays and challenges with project delivery because of temporary customer closures.
The group's net debt was flat on the previous half, ending December 31, at GBP74 million.
"We are pleased with the cash neutral position in the six months ended June 30 given the current climate, which has been driven by our continuing strong focus on working capital," Ricardo said.
The company's automative and performance product divisions were impacted the most with challenging market conditions due to Covid-19 meaning decreases and delays in order intakes.
Ricardo's energy & environment, defence, and rail businesses all reported good performances with increases in order intakes and growth.
Chief Executive Dave Shemmans said: "Our strategy of diversification, together with pro-active management, has again provided some resilience to the group. Our automotive related businesses reported lower profits than last year achieving breakeven in the year; performance products whilst delivering a good level of profits, were also lower than the prior year due to reduced engine volumes; but our defense, rail and energy & environment businesses all reported higher profits than the prior year."
Ricardo shares were up 0.7% at 349.00 pence each on Tuesday morning in London.
By Greg Roxburgh; [email protected]
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