Ultra Electronics sees 'small' revenue impact from pandemic

(Sharecast News) - Ultra Electronics said on Tuesday that it will delay the payment of its final dividend due to the coronavirus outbreak, which it expects to have a "small" impact on revenue.
The company said it continues to trade well despite the pandemic and that while it is too early to assess the full impact on 2020, the order book and demand remain "strong".

Nevertheless, it expects a small impact on revenue from weakness in commercial aerospace and wider customer driven delays, and on margin due to production inefficiencies.

In light of uncertainty over the duration and impact of further disruption from Covid-19 and as a "precautionary" measure, it has decided to delay payment of its 2019 final dividend by withdrawing the proposed recommendation to pay a final dividend of 39.2p a share.

"Based on the board's current knowledge, it intends to pay an additional interim dividend of the same amount in the second half of 2020. The board will keep this under review as the Covid-19 pandemic unfolds," it said.

Ultra said trading in the first quarter of 2020 was broadly in line with its expectations, with good underlying order book, revenue, profit and cash performance.

Demand in its defence markets and most of its critical detection and control markets remains "robust", it said, adding that supply chains are also proving to be generally stable and that "production inefficiency" associated with changing working patterns has so far been kept to a minimum.

The group said liquidity is strong, with "significant" cash and access to its ?300m revolving credit facility, the majority of which is committed to November 2024.