Full year performance in line with expectations
Underlying operating margin of 16.5%
Cash conversion better than expected at 68% and year-end net debt of £296m
Investment to support future growth
- R&D maintained within normal range
- $258m Herley acquisition - integration on schedule and performing well
Standardisation and Shared Services programme on track
Final dividend of 32.3p, an increase of 3.9%
Rakesh Sharma, Chief Executive, commented:
"2015 was a significant year for the Group, in which it completed its largest acquisition, introduced a new market segment structure and launched a Standardisation and Shared Services (S3) programme, whilst continuing to face difficult market conditions. Ultra's full-year performance was in line with market expectations and reflected, as anticipated, a generally lower level of activity across most parts of our government related business. By year-end a comprehensive UK Strategic Defence & Security Review and a two-year US budget agreement had signalled some welcome stability although how this plays out remains uncertain.
Looking ahead, well-publicised macro factors continue to threaten governments' future funding. We expect US government defence expenditure to increase in a presidential election year, but these higher levels of spending will take time to benefit the mid-tier defence industry. For Ultra, most of the delayed orders from 2015 are expected to be secured in the first half of 2016 and we continue to have a number of secure long-term platform positions. In addition we will see a full year benefit from the Herley acquisition. Ultra's Board has considered the market conditions and business challenges and judges that the Group can make satisfactory progress in 2016."
