Ultra Electronics Trading Update
29 July 2007 13:46
The board of Ultra is reporting on trading before the group enters the close period in respect of its interim results for the six months ending 30 June 2007, which will be announced on 30 July 2007.
Ultra expects that revenue growth will be about 6% compared to the first half of 2006, despite the continuing weakening of the US dollar. This growth will be largely organic with a small contribution from Winfrith Safety Systems (a company acquired in July 2006 and now part of the command and control systems team within the information and power systems division). Overall, margins will be maintained through a constant focus on achieving operational efficiencies while satisfying the expectations of the group's customers.
Ultra's strong cash generation in the final quarter of 2006 will impact operating cashflow in the first half of 2007, as will the group's continuing investment in the Boeing 787 and Airbus A400M programmes. As anticipated, the operating cash conversion is therefore unlikely to exceed 50% in the period, though the current expectation is for a stronger performance for the full year.
The group has recently secured a number of contracts on long-term programmes, including a command and control system for Halifax Port, Canada and a contract for a capability demonstration of a loitering munition system for the British Army. At the end of the first half, despite adverse currency effects, the order book is expected to be approximately 5% higher than twelve months ago when it was £550m.
Ultra's broad spread of activities and its successful positioning on a range of international programmes give the board confidence in the group's continued progress in the second half of 2007.
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