Engineering group Ricardo plc said a strong performance in Asia and growth in electric vehicle orders helped it deliver increased annual profits and offset challenges in its UK business.
The company, which develops engines, transmissions, vehicle systems and hybrid & electric systems for the automotive and defence sectors, on Thursday reported a 2% uplift in its pretax profit to £39mln in the year to the end of June on revenues 8% higher at £380mln.
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Ricardo said order flow disruption in the second half and the close out of some challenging projects impacted performance in its UK automotive business but that changes had been made to rectify the situation.
In a note to clients, analysts at Liberum said the way Ricardo dealt with challenges in its UK business were a testament to the “resilience and diversification now present in the business”
“Our global presence and strategy of sector diversification helped the business to mitigate the continued impact of uncertainty in the UK market. Our growing order intake, particularly in Asia, reflects our clients' continued demand for our high-quality products and services,” CEO Dave Shemmans said in a statement.
“We have also worked with traditional customers in new areas such as electric and hybrid vehicle development, battery development and systems integration. We have, however, also seen some disruption of order flows from some traditional customers who are looking to navigate the industry change. This was particularly noticeable in the UK during the second half of the financial year, when the effects of the reduction in sales of diesel vehicles were magnified by the continued uncertainty around Brexit.”
The company said the shift to electrification helped it achieve a record order intake of £413mln, up £47mln on the prior year and that its year-end order book stood at a record £288mln – up £40mln on June 2017.
Shares in Ricardo were 2.6% down at 810p in early trade.