TIDMRCDO
RNS Number : 7432Z
Ricardo PLC
27 January 2022
27 January 2022
Ricardo plc
Ricardo plc ("Ricardo") is a world class global engineering,
technical, environmental and strategic consultancy business, which
also manufactures and assembles niche, high-quality and
high-performance products.
Ricardo is today providing a trading update in respect of the
six months ended 31 December 2021.
Trading update
Good growth in the first half
In the six months to 31 December 2021 (the period), Ricardo has
continued to trade in line with the Board's expectations, with a
good level of new orders and a strong cash performance.
Order intake was strong at GBP210m, up 16% on the six months to
31 December 2020 (the prior period) and up 23% on the six months to
30 June 2021 (growth of 18% and 23%, respectively on a constant
currency basis). The order book at 31 December 2021 was in excess
of GBP310m, compared to GBP294m at 30 June 2021 and GBP318m at 31
December 2020.
Within our segments:
-- Strong growth in Energy & Environment ('EE'), with an
acceleration in climate related work, supporting international
organisations and governments in the lead up to and then following
COP26. This includes a heightened focus on environmental, social
and corporate governance ('ESG') from private sector clients which
are seeking support and advice in respect to Net Zero strategy
development, target setting, monitoring and reporting.
-- Rail delivered a similar level of order intake and revenue
compared to the prior period, with improving margin due to higher
utilisation rates. Rail was successful in winning its first
significant contract in North America.
-- Overall, performance in Automotive & Industrial
('A&I') continues to be challenging, due to the impact of the
slow recovery from COVID-19. Nevertheless, we are starting to see
improved momentum with order intake growth in our new mobility
solutions.
-- A resilient performance in Performance Products ('PP'),
driven by an increase in volumes on key client programmes as well
as industrial engineering work. Supply chain issues and chip
shortages continue to provide challenges which we have proactively
worked to overcome.
-- Strong growth in Defense, with revenue and profitability both
improving on the prior period, driven by a combination of an
increase in ABS/ESC deliveries, field support activities, and
software and systems engineering work.
Strong cash generation
At 31 December 2021, net debt was GBP39m compared to GBP47m at
30 June 2021 and GBP50m at 31 December 2020. Excluding specific
adjusting items, the business has generated a net cash inflow of
GBP16m in the period. This has been achieved through a combination
of the profits in the period, together with a reduction in working
capital in excess of GBP10m. In the period, we paid earn out costs
in relation to previous acquisitions of GBP5m and exceptional
redundancy costs of GBP2m.
The Revolving Credit Facility ('RCF') of GBP200m continues to
provide the Group with committed funding available for the
remaining term through to July 2023, alongside the Group's
uncommitted overdraft facilities of GBP16m. At 31 December 2021,
the amount undrawn on the RCF was GBP113m and we held net liquid
cash reserves of GBP54m. This provides the Group with total cash
and liquidity of GBP183m as at 31 December 2021.
Strategy update
Ricardo plans to announce its half-year results on 24 February
2022. As well as reporting on the half year business performance,
we will cover the Group's objectives and the future direction of
our Automotive & Industrial business unit.
We also look forward to hosting a c apital -m arkets event in
May to present our sharpened strategy and our plans for
transitioning to the future.
Our strategy is to refocus the Group on the growing mega-trends
within our core markets including climate change, energy transition
and rapid urbanisation, which will support long-term sustainability
and value for all stakeholders.
Graham Ritchie, Chief Executive Officer, commented :
"We are pleased with the progress that we made in the first
half-year of trading, particularly the increase in order intake and
the strong cash generation to enable ongoing investment for
growth.
Our half-year results are in line with our expectations, and
although we are seeing continued momentum in the second half, we
remain cautiously optimistic as economic uncertainties remain.
As we look ahead, we are focused on accelerating growth across
the business and sustainably delivering enhanced value for all our
stakeholders. The capital - markets event planned for late spring
will set out how we will drive performance to achieve our full
potential."
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055 (as amended by the FCA pursuant to
Technical Standards (Market Abuse Regulation) (EU Exit) Instrument
2019), the person responsible for releasing this announcement is
Patricia Ryan, Company Secretary of Ricardo plc.
About Ricardo plc
Ricardo plc is a world-class environmental, engineering and
strategic consulting company listed on the London Stock Exchange.
With over 100 years of engineering excellence, we provide
exceptional levels of expertise in delivering leading edge and
innovative cross sector sustainable products and solutions, helping
our global customers increase efficiencies, achieve growth and
create a clear and safer future. Our mission is clear -- to create
a world fit for the future. For more information visit
www.ricardo.com
This announcement is released by Ricardo plc and contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under
Article 17 of MAR.
Enquiries:
Natasha Perfect
Ricardo plc
Tel 01273 455 611
Natasha.perfect@ricardo.com
Elisabeth Cowell
SECNewgate
Tel 020 757 6882
ricardo @secnewgate.co.uk
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