29th Feb 2016 08:07
LONDON (Alliance News) - Ultra Electronics Holdings PLC said Monday pretax profit was higher for the year ended December, despite its government-related business seeing a lower level of activity.
The defence company reported a pretax profit of GBP34.8 million, up from GBP21.5 million the previous year, which it said came on the back of the acquisition of Ultra Herley, a designer and producer of radio frequency and microwave systems for use in missile, radar and simulation applications, in August.
This boosted revenue, which came out at GBP726.3 million for 2015, up 1.8% from GBP713.7 million the previous year.
Elsewhere, Ultra Electronics said its Ultra Herley subsidiary had received a contract worth USD14.3 million with an unnamed major US prime contractor. It said it would be providing electronic hardware for a US ballistic missile programme.
Ultra Electronics added its government related business had been hit during the year, but said a comprehensive UK Strategic Defence & Security Review and two-year US budget agreement could provide some welcome security, although "how this plays out remains uncertain".
The group also pointed to the delay in GBP100.0 million worth of orders, which it said would be completed in the first half of the current financial year. These include India torpedo defence orders. It said its order book at the end of 2015 was GBP753.8 million, down from GBP787.3 million the prior year.
Ultra Electronics raised its final dividend to 32.3p, up from 31.1p the previous year, meaning its full year dividend is 46.1p, 4.1% higher than in 2014.
"Looking ahead, well-publicised macro factors continue to threaten governments' future funding. We expect US government defence expenditure to increase in a presidential election year, but these higher levels of spending will take time to benefit the mid-tier defence industry. Ultra's board has considered the market conditions and business challenges and judges that the group can make satisfactory progress in 2016," said Chief Executive Rakesh Sharma.
Ultra shares were up 0.1% to 1,899.00p.
By Hannah Boland; [email protected]; @Hannaheboland
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