Ultra’s profits soar after increase in defence spending at home and abroad
Electronics group Ultra has posted a 113 per cent increase in profits due to new orders.
Shares in the company have risen 10.81 per cent as a result to 2,112p.
The FTSE 250 listed company released its results for year ending 2019 showing profit before tax had risen to £91m in 2019 from £42.6m in 2018. Net profit was £74.5m up from £32.4m in 2018.
“We enter 2020 with an enhanced, engaged and motivated team and a strong order book,” said boss Simon Pryce.
“In addition to focusing on improved delivery, we will be accelerating investment in internal R&D and underlying IT infrastructure as well as process standardisation and excellence.”
Ultra’s revenue also grew 7.7 per cent from 2018’s £766.7m figure to £825.4m in 2019.
The company’s dividend rose five per cent from 51.6p to 54.2 over the same period.
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The company’s order book broke the £1bn mark, having registered £983.9m in 2018, something the company attributed to increased defence spending, particularly in the US.
Reports in the Sunday Telegraph said an additional cause was an increase in Russian submarine activity around the UK.
Therefore, the government has invested in underwater sensors for the new P8 Poseidon maritime patrol aircraft to counter this.
Net debt showed a small decrease to £154.8m from £157.5m, a 1.7 per cent fall year-on-year.
The wider picture
Although the results stated Ultra is well placed to take advantage of military equipment around the world being renewed, risks were highlighted.
These included climate change, regulatory incidents, a trade deal with the EU not being agreed and coronavirus.
Several sectors have reported disruption from the outbreak.
Leading airlines including British Airways and Qantas have cancelled flights as demand has fallen.
Last week, regional UK operator Flybe collapsed.
Earlier, aviation services firm John Meinzies announced the suspension of its dividend due to the outbreak.