Ultra Electronics continues to standardise systems, outlook unchanged
Defence group Ultra Electronics has outlined further details of its group-wide initiative to standardise systems together with some processes to drive business efficiency.
Aerospace and Defence
10,798.84
16:59 23/04/24
FTSE 250
19,799.72
16:59 23/04/24
FTSE 350
4,424.29
16:59 23/04/24
FTSE All-Share
4,378.75
17:14 23/04/24
Ultra Electronics Holdings
3,500.00p
17:09 29/07/22
The company estimated that the total project costs of about £30m over three years will generate enduring annual efficiency savings of about £20m, which will be deployed to self-fund the programme from 2016 to 2018, increase investment in research and development, increase competitiveness and improve profits in the medium term.
There will be an initial one-off non-underlying cost of up to £5m in 2015, of which around half will be cash, to cover the programme set-up, it said.
Following the changes, the group will be segmented in a way that will better reflect the markets that it addresses, it said. It has already changed its reported lines to make them more consistent with the market facing segments and the divisions that have been renamed aerospace & infrastructure, communications & security and maritime & land.
The news was laid out in the group's latest trading statement, in which it said it continues to expects its performance to be more weighted toward the second half, with US defence revenues continuing to be affected by the uncertainty surrounding the US fiscal year 15/16 budget.
The segment has also felt the impact of the potential of a continuing resolution in relation to government appropriations, while further, recent challenges to the Patriot Act have affected revenues from its US Sotech business and the termination of the Oman contract has continued to affect cash.
"Despite the headwinds, order intake for the first half is expected to result in a book to bill ratio close to one and our recent acquisitions are performing well," the firm said.
"Ultra's balance sheet remains strong."