LONDON (ShareCast) - (Sharecast News) - Engineer Ricardo on Thursday reported an increase in annual revenue driven by success in the Asian market and a record order intake.
Turnover of £380m in the year to 30 June was up 8% on the prior year as the order book ended the year at a record level of £288m, up 16% from the year before thanks to record order intake up 13% to £413m.

Underlying profit before tax was up 2% at the reported level to £39.0m, but down 1% on an organic basis. Reported PBT decreased 11% to £28.5m primarily as a result of £4.8m of costs from restructuring of the automotive businesses in the US and Germany, partially offset by £1.4m from the government's research & development claims scheme.

The fully listed firm, which develops engines, transmissions, vehicle systems and hybrid and electric systems for the automotive and defence sectors, experienced some "mixed" performance across the group, with good results within Performance Products arm and strong performance from the acquisition of Control Point Corporation but the UK Automotive business saw some order flow disruption in the second half and closed out some challenging projects, but this was partly offset by growth in other Technical Consulting businesses.

The company disposed of test facilities in Chicago and Southern Germany during the year in order to continue its move towards electrification while some changes were made and "swiftly addressed" to shore up the UK Automotive business.

CPC was integrated into Ricardo's defence division, which won a number of new contracts across the globe in land defence and in the marine sector, both surface and sub-surface.

Chief executive Dave Shemmans hailed the record order book and successful acquisition and integration CPC. "Our global presence and strategy of sector diversification helped the business to mitigate the continued impact of uncertainty in the UK market."

Group net debt was cut by 31% to £26.1m and increased its total dividend 6% to 20.46p as cash and cash equivalents increased by 19% over the year to £33.1m at 30 June.

"We enter the new financial year with a more agile business and a confident and positive outlook. Ricardo's global capabilities and presence in a number of growing markets, together with its strong order book, all provide a solid foundation for continued growth," said Shemmans.

Broker Liberum was impressed that the company has addressed internal issues and achieved record order intake levels despite difficulties with the UK Automotive business, and gave a rating of 'buy' and a target price of 1,130p for shares in the company.

Ricardo's shares were down 2.88% at 808.00p at 0840 BST.

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