Ultra Electronics Holdings plc (LON: ULE) have reassured shareholders that trading is inline with market expectations and that progress has been made since their interim results were published.
The FTSE250 (INDEXFTSE: MCX) listed firm specializes in serving the defence, security, transport and energy industries.
The defence engineering company said for the nine months to September 30 there has been good order book development, as anticipated.
Although there has been some pessimism from shareholders, Ultra Electronics have been quick to reassure shareholders that despite poor interim results, trading has kept in stream with expectations.
The ongoing strategic evolution is progressing and there remains good long term opportunities and growth potential, Ultra Electronics asserted.
“Our major markets are growing and our strong technology base is positioning us well on existing and potential future programs,” it said.
The bullish trading update will be read by investors and give them huge confidence for the future outlook.
Ultra Electronics has a market cap just below £1.43bn, making it the UK’s fifth largest defence firm behind market leader BAE Systems (LON: BA), valued at more than £18bn.
The firm still has a long way to catch up to global titans such as Lockheed Martin (NYSE: LMT) or Boeing (NYSE: BA) who have experienced a strong trading year with continued demand.
Ultra’s order book rose above the £1bn mark for the first time since 2011 at the half year stage in June.
On Friday, Ultra’s Ocean Systems business won a potential $100.9 million contract to design, develop, test and integrate a radar software management platform intended for the US Navy’s new and in-service submarines.
We believe that at a divisional level, trading is in line with expectations and we are optimistic that cash conversion might be slightly better than we anticipated, related to the working capital normalisation taking place this year’, said analysts at Numis Securities (LON: NUM).
Numis is forecasting Ultra to deliver £104.1 million of pre-tax profit for the full year to 31 December 2019, £824 million revenue.
The analysts estimate pre-tax profit to grow to more than £115 million by 2021 showing significant strides after volatile 2019 trading year.
Preliminary results for the year ending 31 December 2019 will be released on 10 March 2020.
Shares of Ultra Electronics jumped 3.05% trading at 2,024p per share. 6/11/19 12:47BST.
