Ricardo Plc Regulatory News (RCDO)

19 May 2016

Ricardo plc

Trading update

Ricardo plc is a global engineering and strategic, technical and environmental consultancy business with a value chain that includes the niche manufacture and assembly of high-performance products. We employ over 2,800 professional engineers, consultants, scientists and support staff to deliver class-leading and innovative products and services for the benefit of our customers, which include the world's major transportation original equipment manufacturers and operators, supply chain organisations, energy companies, financial institutions and government agencies.

Ricardo is today providing a trading update for the ten months to 30 April 2016. The results for the full year ending 30 June 2016 will be announced on 15 September 2016.

In the ten months to the end of April we have seen good revenue growth, and profit for the Group is tracking in line with our full year expectations.

Revenue in the ten months to the end of April was 32% higher than the same period last year and on a like-for-like basis, excluding the acquisitions of Lloyds Register Rail ('LR Rail') and Cascade, revenue is up by 9% compared to the prior year.

Our Technical Consulting business is continuing to perform well. Within this segment, our European business is showing good growth following the integration of our operations in the UK and Germany in the prior year; our Rail business and Energy & Environment business both continue to perform well, and we continue to win a good level of work in Asia. In the US, as previously indicated, trading continues to be difficult with reduced levels of work in Detroit and Chicago partially offset by increasing work in California.

In our Performance Products segment we now expect profits in the second half of the year to be lower than the same period last year as increased volumes in respect of the new engine supply contract for McLaren are expected to be more than offset by lower one-off software license sales and a reduced level of high performance and monorail transmissions in the period.

Order intake in the ten months to the end of April was £278m, which is £62m higher than the same period last year. On a like-for-like basis, excluding the acquisitions of LR Rail and Cascade, order intake is £11m higher than the prior year. The total order book at the end of April was £207m compared to £152m at the same time last year.

The Group continues to maintain a robust balance sheet. As seen in the first half of the year we continue to invest in working capital as our revenues expand in Asia and the Middle East, our Energy & Environment business transitions towards more private sector and international work and we invest in our major long-term assembly program.

Dave Shemmans, Chief Executive Officer, commented:

"Overall we have made good progress in the period and the Group is tracking in line with our full year expectations. I am pleased with the continued growth in our existing Technical Consulting business and the successful integration and performance of our recent acquisitions. The US continues to be challenging in our traditional Detroit market although there is good growth in California and we are therefore repositioning our business to meet this opportunity. In Performance Products we are pleased to see the expanded McLaren engine facility commissioned and reach full production on schedule.

Overall, we remain confident of continued progress in the rest of the year."

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