Ultra Electronics' profits hit by terminated Oman contract
Ultra Electronics’ pre-tax profits plummeted in 2014 due to the early termination of a contract in Oman.
The company’s statutory pre-tax profit fell to “21.5m in 2014, a significant fall from 2013’s £49.3m. However, the technology group said that aside from the impact of the Oman Airport It contract, annual performance was in line with expectations. Excluding contract fallout, pre-tax profit rose to £68.4m last year, up from £45.1m.
Underlying pre-tax profit remained largely flat, not including the Oman contract and other one off costs, at £112m compared to £112.6m a year earlier. Revenue also ticked down only slightly to £702m from £703.5m, excluding the Oman contract. Total revenue for 2014 was down to £713.7m from £745.2m.
Ulta will pay a final dividend of 31.1p per share, up from 29.5p, with total dividend for the year up 5% to 44.3p from 42.2 in 2013.
"In 2014 group order intake increased significantly, reflecting demand across our market segments for Ultra's specialist capabilities. Market conditions, specifically government spending pressures in the US and UK, continued to frustrate revenues in 2014, although excluding Oman the second half performance showed an improvement on the first half," said Rakesh Sharma, Ultra Electronics' chief executive.
“The events that culminated in the early termination of our Oman Airport IT contract provided an unwelcome distraction, although this will allow us to bring to a head what is a unique and increasingly difficult commercial contract,” Sharma added.