H1 update lifts Ultra Electronics

Shares in FTSE 250 defence technology firm Ultra Electronics (LON:ULE) shot 8.59% higher to 2,376p (as of 13:30 BST) as revenues rose by 5.8% during the six months ended 30th June. The order book at the end of the period was 15.7% higher than at the comparable point a year ago and operating profits were up by 10.5%. Management said that there was positive momentum moving into the second half of 2020, despite challenges in the commercial aviation sector.

CEO Simon Pryce commented: “We’ve responded with great agility by rapidly adapting our processes and working practices whilst continuing to deliver for our stakeholders and particularly our customers. Any minor productivity issues were more than compensated for by lower than anticipated SG&A costs associated with the changes in ways of working. We also made good progress on our transformation initiatives. As a result, we have delivered a strong financial performance in H1, despite the impact of COVID.

“We have very good visibility entering H2. Our major markets remain stable, but we do expect weak commercial aerospace demand to be more of a headwind during the second half. We expect SG&A costs to normalise and we are accelerating some of our transformation initiatives. Despite this, we remain confident that 2020 will, as anticipated, be a year of good progress for Ultra. We will therefore be paying both the final 2019 dividend as originally recommended and an interim 2020 dividend.

“We are continuing to make good strategic progress. Our technology and capabilities are well positioned to address customers’ existing and emerging needs. We continue to win good positions on long-term programmes and are pleased with the transformation momentum we have created. We are therefore confident in our ability to create exceptional value for all our stakeholders and in Ultra’s exciting future“.