The boss of Ultra Electronics is to step down after 28 years with the firm, amid concerns over "mounting pressures" in the funding of UK defence programmes, the firm confirmed this morning.
Shares in the FTSE 250 firm plummeted over 23 per cent in the wake of the news.
Rakesh Sharma has quit as chief executive of Ultra with immediate effect. The announcement follows reports late on Friday evening that Sharma was set to be shown the door.
Current chairman Douglas Caster will assume the position of executive chair until Sharma's successor is found.
Ultra also issued a trading statement today. While most of the group's markets "have been satisfactory", Britain has become a big headache.
"The UK market has been difficult and has become increasingly so in the second half," the firm said.
There are mounting pressures in the funding of UK defence programmes and this has resulted in the UK [Ministry of Defence] MoD pausing, cancelling or delaying numerous programmes. Within the last few weeks, a number of our UK orders budgeted for 2017 have been affected.
As a result, the Ultra said it expects full-year total revenue to be around £770m, with organic revenue some four per cent lower than the previous year.
Caster said: "While market conditions have been more challenging in the last few years, the group has strong market positions, differentiated technologies and talented people. While the UK defence market is difficult, defence spending in the US, the group’s largest market, is increasing."
Turning to Sharma's departure, Caster said: “Throughout his 28 years of service to Ultra, Rakesh has contributed significantly to the Group’s development into an international provider of specialist capabilities with positions on a broad number of platforms and programmes.
Sharma said: “It has been a privilege to be chief executive of Ultra and I wish the group and all its staff well for the future.”