Revenue increased despite mixed market conditions across the Group's broad portfolio
Increased investment to drive future growth
- revenue reinvested by Ultra in new product and business development up to £49m from £41m in 2011
- acquisition of three specialist businesses in the year
Underlying operating margin(1) of 16.1%
Operating cash conversion* of 73% (five-year average 98%)
Robust balance sheet with headroom for further acquisitions
Order book of £905m, with opening order cover for 2013 of 58% (2012: 54%) against current consensus of analysts forecast
Rakesh Sharma, Chief Executive, commented:
"Ultra's results reflect good performances in the transport, energy, security & cyber sectors, offset by the challenges the Group faces in its traditional defence markets. The UK and US defence markets have experienced a year of budget uncertainty that has delayed the start of new programmes and resulted in incremental-only funding of others, notably in the land domain. Mixed conditions across Ultra's sectors are reflected in the Group's underlying organic performance. Nevertheless, the Group continued its strategy of investment in differentiated specialist capabilities to underpin medium and long-term growth, through increased R&D and through acquisitions. In the year, Ultra also added three businesses in the communication, cyber and power sectors that the Group has identified as growth areas. Ultra's constant focus to optimise the cost base of each business has enabled the Group's underlying operating margin to be maintained at over 16%.
Ultra's resilience stems from its wide portfolio of capabilities, products and services, positioned on a large number of international platforms and programmes. The Group recognises the changing dynamics in a pressurised defence market and is responding with cost effective and differentiated solutions tailored to customer needs. In this sector and in non-defence, Ultra is focussing R&D investment in areas of preferential customer spend to position for future opportunities. The Group will continue to broaden and diversify its customer base and markets worldwide. Revenue in security, transport and energy now represents 44% of the Group total, with revenue outside Europe and North America at 15%. Ultra's proven business model reinforces the Board's confidence that the Group will maintain business performance in the short term whilst continuing to position to achieve medium and long-term growth".
