TIDMULE
RNS Number : 3048C
Ultra Electronics Holdings PLC
11 November 2009
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Ultra Electronics Holdings plc
("Ultra" or "the Group")
Interim Management Statement
In accordance with the requirements of the UK Listing Authority's Disclosure and
Transparency Rules, Ultra today issues its interim management statement for the
period 1 July 2009 to 10 November 2009.
Markets
Conditions in Ultra's markets remain broadly as noted on 3 August 2009 in the
interim announcement of the Group's 2009 results. In Ultra's main military
markets, the US and UK defence budgets remain sufficiently large to give
significant headroom for further growth of the Group. In the UK there is some
recent evidence of delays in the award of contracts, as defence priorities are
re-examined.
Strategy
While it is unlikely that Ultra will be completely insulated from downward
pressure on budgets, the Board believes that the Group's strategies make it
inherently resilient. This resilience is driven by:
* within defence, a focus on providing smart electronic solutions that provide
increased capability for new and existing platforms. Electronics is a 'sweet
spot' of demand, representing an increasing proportion of equipment budgets
* a broadening of Ultra's range of specialist capability areas ('niches') and an
expansion of the number of long-term, international platforms and programmes on
which they are specified. No single niche or programme is key to the Group's
performance
* winning new business with innovative and differentiated solutions and then
executing contracts effectively
* continued investment in new products, business development and value-adding
acquisitions
* a focus on moving into adjacent growth markets, both civil and military and the
expansion of the Group's geographic footprint.
Trading
Revenue has continued to grow and trading in the period has been in line with
the Board's expectations. Ultra's order book continues to provide its customary
level of visibility, with firm order coverage for the next 12 months' trading
above 60%. Contracts won in the period include:
* an award from Raytheon for high capacity radios used in Patriot air defence
missile systems for an export customer
* international contracts for active and passive sonobuoys
* a multi-year support contract for the sonars fitted to the Royal Navy's Type 45
destroyers
* a follow-on contract from Network Rail to provide specialist trackside
electrical power equipment.
Financial position
Ultra's balance sheet remains strong and there has been no significant change in
the financial position of the Group since that reported as at 3 August 2009.
Reflecting its normal focus on careful cash management, the Group has
significant headroom over the covenants associated with its current banking
facilities. Good progress is being made towards a refinancing in early 2010.
There has been no significant event or transaction since 1 July 2009 that could
have a material impact on the financial position of the Group.
With regard to acquisitions, the Group completed the acquisition of Scytale in
the period for an initial consideration of $5.3m. Scytale is a US-based
specialist in the secure management of cryptographic keys. Ultra continues to
target companies with a proven track record, that have differentiated positions
in growing, niche markets and that can be acquired at appropriate prices.
Management changes
Julian Blogh has informed the Board of his intention to retire at Ultra's AGM in
April 2011, by which time he will have been the Group's Chairman for six years,
having previously been Chief Executive for eleven years. Douglas Caster intends
to relinquish the role of Chief Executive at the same time and the Board's
intention is that he should succeed Julian Blogh as Chairman.
With effect from 1 January 2010, Rakesh Sharma, currently Managing Director of
the Group's Information & Power Systems division, will become Ultra's Chief
Operating Officer ('COO') with responsibility for all of Ultra's operations. It
is planned that Rakesh will join the Board at the AGM in April 2010 with the
intention of succeeding Douglas as Chief Executive in April 2011.
Recognising the contribution that Rakesh, as COO, will make to the management of
the Group, Douglas Caster will reduce his time commitment to the Group to an
average of three days per week from the AGM in April 2010. He will at the same
time add the role of Deputy Chairman to that of Chief Executive.
Outlook
Based on the Group's strong order book, resilient business model and broad range
of niche capabilities, the Board continues to expect that the Group will make
good progress in 2009 and beyond.
Ultra will make the preliminary announcement of its results for the year ending
31 December 2009 on 1 March 2010.
- Ends -
Enquiries:
Ultra Electronics Holdings plc 020 8813 4307
Douglas Caster, Chief Executive
Paul Dean, Group Finance Directorwww.ultra-electronics.com
information@ultra-electronics.com
Susan Ellis, Senior Communications Adviser 07836 522722
Hogarth020 7357 9477
James White
Cautionary Statement:
This interim management statement has been prepared solely to provide additional
information to shareholders as a body to meet the relevant requirements of the
UK Listing Authority's Disclosure and Transparency Rules. The interim management
statement should not be relied upon by any other party for any other
purpose.
The interim management statement contains certain forward-looking
statements. These statements are made by the directors of Ultra in good faith,
based on the information available to them up to the time of the publication of
the interim management statement but such forward-looking statements should be
treated with caution due to the inherent uncertainties, including both economic
and business risk factors, underlying any such forward-looking
statements.
This interim management statement has been prepared for the
Group as a whole and therefore gives greater emphasis to those matters which are
significant to Ultra and its subsidiary undertakings as a whole
Ultra undertakes no obligation to revise or update any forward looking statement
contained within this announcement, regardless of whether those statements are
affected as a result of new information, future events or otherwise, save as
required by law and regulations.
Further information about Ultra:
Ultra Electronics is an internationally successful defence and aerospace company
with a long, consistent track record of development and growth. Ultra businesses
constantly innovate to create solutions to customer requirements that are
different from and better than those of the Group's competitors. The Group has
over one hundred distinct market or technology niches within its twenty five
businesses. The diversity of niches enables Ultra to contribute to a large
number of defence, aerospace and civil platforms and programmes and provides
resilience to the Group's financial performance.
Ultra has world-leading positions in many of its niches and, as an independent,
non-threatening partner, is able to support all of the main prime contractors
with specialist capabilities and solutions. As a result of such positioning,
Ultra's systems, equipment or services are often mission-critical to the
successful operation of the platform to which they contribute. In turn, this
mission-criticality secures Ultra's positions for the long term which underpin
the superior financial performance of the Group.
Ultra offers support to its customers through the design, delivery and support
phases of a programme. Ultra businesses have a high degree of operational
autonomy where the local management teams are empowered to devise and implement
competitive strategies that reflect their expertise in their specific niches.
The Group has a small head office and executive team that provide to the
individual businesses the same agile, responsive support that they provide to
customers as well as formulating Ultra's overarching, corporate strategy.
Across the Group's three divisions, the major market sectors in which Ultra
operates are:
- battlespace IT, summarised as being the systems and equipment that allows
coalition commanders to have an integrated, real-time picture of the disposition
of friendly and enemy forces that is better than the one available to the enemy.
This information superiority underpins rapid decision making which, together
with effective command, control and communications, translates into military
superiority. The use of battlespace IT is fundamental to the implementation of
the military doctrines of 'network-centric warfare' or 'network-enabled
capability' that are seen as transformational in the capability to win future
battles. Expenditure on battlespace IT equipment therefore continues to
represent an increasing share of the total defence budget in the main markets in
which Ultra operates.
- sonar systems, expanding Ultra's traditional world-leading airborne
anti-submarine warfare capability into broader activities in the underwater
battlespace. These include integrated ship and submarine sonar systems,
persistent seabed-deployed sensor arrays, torpedo defence and sea mine disposal
systems. The fact that over forty countries have, between them, more than four
hundred highly capable, stealthy submarines is continuing to focus expenditure
in this sector.
- civil and military aircraft equipment, Ultra provides specialist sub-systems
and equipment for military and civil aircraft. The main military aircraft
programmes on which Ultra equipment is fitted continue to have political
support, underpinned by consistent financial commitment. For civil aircraft,
record order intake performance by all major aircraft manufacturers underpins
increasing build rates for the medium term.
- specialist defence equipment, including power conversion and signature systems
for naval ships and submarines. Ultra's specialist capability in high integrity
controls for submarine nuclear reactors is included in this sector, for which
there is continuing commitment to new platforms and the upgrade of existing
boats. Ultra also supplies advanced sub-systems for modern armoured vehicles
including those for electrical power management, indirect vision and weapon
control. The need for increased mobility and force protection is driving a
number of large military vehicle procurements in Ultra's main markets.
- specialist civil systems and equipment, including Ultra's advanced airport IT
solutions. Airline passenger growth around the world is driving continuing
expansion and upgrade of airport infrastructure. Ultra supplies trackside power
equipment for rail transit systems, for which demand continues driven by the
need to expand and upgrade rail networks. The UK market for nuclear power
generation is expanding and Ultra's offering derived from its equivalent
military capability is well positioned to benefit.
This information is provided by RNS
The company news service from the London Stock Exchange
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