Ultra Electronics ULE Interim Management Statement

  Ultra Electronics (ULE) - Interim Management Statement

RNS Number : 2778R
Ultra Electronics Holdings PLC
16 November 2012








                                      

                                      

                                      

                               Embargoed until
0700
                               16 November 2012

                                      

                        Ultra Electronics Holdings plc

                           ("Ultra" or "the Group")

                                      

                         Interim Management Statement



Ultra, the  international defence,  security,  transport and  energy  company, 
today issues its Interim Management Statement for the period 1 July 2012 to15
November 2012.



Markets

Conditions in Ultra's markets remain broadly as noted on 30 July 2012 when the
Group reported its Interim Results.



In  the  US,  a  six-month  Continuing  Resolution  from  1  October  2012,  a 
Presidential election year  and the approaching  possibility of  sequestration 
measures combine to cause a lack of clarity on future defence funding. In  the 
UK, while the Government has acted to stabilise defence spending around a core
programme, the overall programme is yet  to be established. As a  consequence, 
in both the  US and  UK defence markets,  contract officers  are delaying  the 
start of new  programmes and  are unwilling  to commit  more than  incremental 
funding from  approved programmes,  resulting in  a reduction  of order  flow. 
Despite this backdrop, certain segments of  the defence market, such as  sonar 
and surveillance, continue to offer long term growth prospects.



The security and cyber  market remains strong and  now represents over 20%  of 
Group revenue. Strategic acquisitions have equipped Ultra with a comprehensive
suite of specialist  cryptographic and cyber  security capabilities that  will 
benefit from the growing government and commercial spend in cyber protection.



Within transport and energy  markets, which also represent  over 20% of  Group 
revenue,  long-term,  worldwide  growth  in  air  travel  continues  to  drive 
investment in commercial aircraft production and airport infrastructure;  both 
areas benefit Ultra's specialist capabilities. Investment in new nuclear power
station build and  life-extension of existing  plants offer opportunities  for 
Ultra's nuclear control and specialist sensor products.



Performance

Against a backdrop of adverse market conditions in the defence sector, largely
driven by political discord over US deficit management, the Board expects  the 
Group's performance in the year to be sustained around 2011 levels.



In segments where high demand has fallen,  such as tactical radios for the  US 
Army, the Group has acted swiftly to reduce its cost base, with  restructuring 
costs also impacting 2012 profits.



Ultra continues  to  secure  contracts  in  areas  of  preferential  spend  on 
multi-year, international  platforms and  programmes which  support  long-term 
revenues. Recent substantial  orders include:  a significant spend  by the  US 
Navy on perimeter security, anti-terrorism and energy control products; and an
order to provide additional Litening targeting pods for the Royal Air Force  - 
following the system's exceptional performance in the Libyan conflict. Ultra's
other markets remain  strong, evidenced  by the recent  award of  a five  year 
contract to  update and  expand the  system supplying  baggage  reconciliation 
services to all five terminals  at London Heathrow, the largest  international 
airport in Europe. Ultra's  position on a number  of aircraft programmes  will 
start to provide increased  benefit as deliveries  accelerate over the  coming 
years.



Elsewhere, growing sales in  security and cyber,  transport and energy,  which 
collectively now account for about  45% of revenue, are contributing  strongly 
to Ultra's overall performance.



Ultra's balance sheet remains strong and there has been no significant  change 
in the financial position of  the Group since that  reported on 30 July  2012. 
The Group  has  substantial  headroom  associated  with  its  current  banking 
facilities.



There has been  no significant event  or transaction since  30 June 2012  that 
could have a material impact on the financial position of the Group.



The Group  continues  to be  cash  generative and  has  the balance  sheet  to 
maintain its  investment,  both internally  and  in bolt-on  acquisitions,  to 
exploit areas  of  growth  and  preferential spend.  With  regard  to  further 
acquisitions, Ultra continues to target companies with a proven track  record, 
that have differentiated positions in growing,  niche markets and that can  be 
acquired at value-enhancing prices.



Management change

Paul Dean has been approached to take  a Finance Director role outside of  the 
defence and aerospace sector and he  has announced his intention to leave  the 
Group. After four highly valuable years of service, he will leave Ultra around
the end of March 2013. A selection process to identify a new Finance  Director 
is underway and the market will be updated in due course. The Board wish  Paul 
every success in his new role.



Summary

The Board  remains  confident in  the  Group's strategies  for  growth.  Ultra 
manages an extensive  portfolio of differentiated  capabilities which  provide 
resilience in today's challenging conditions. The Group is well positioned  on 
new build and upgrade programmes that  will serve to underpin growth into  the 
medium term.



Ultra will make its preliminary announcement  for the year ending 31  December 
2012 on 4 March 2013.



                                   - Ends -



Enquiries:



Rakesh                 Sharma,                 Chief                 Executive 
    020 
8813 4307

Paul Dean, Group Finance Director



Susan               Ellis,                Senior                Communications 
Adviser 07836 522 722

James                                White,                                MHP 
Communications
020 3128 8756





www.ultra-electronics.com

Cautionary Statement:



This  interim  management  statement  has  been  prepared  solely  to  provide 
additional information  to  shareholders  as  a  body  to  meet  the  relevant 
requirements of the UK Listing Authority's Disclosure and Transparency  Rules. 
The interim management statement should not be relied upon by any other  party 
for any other purpose.

The interim management statement contains certain forward-looking  statements. 
These statements are made by  the directors of Ultra  in good faith, based  on 
the information available to  them up to  the time of  the publication of  the 
interim management  statement but  such forward-looking  statements should  be 
treated with  caution  due  to  the  inherent  uncertainties,  including  both 
economic and  business  risk  factors,  underlying  any  such  forward-looking 
statements.

This interim management statement has been  prepared for the Group as a  whole 
and therefore gives greater emphasis to those matters which are significant to
Ultra and its subsidiary undertakings as a whole



Ultra undertakes  no  obligation  to  revise or  update  any  forward  looking 
statement contained  within this  announcement,  regardless of  whether  those 
statements are  affected as  a result  of new  information, future  events  or 
otherwise, save as required by law and regulations.



Further information about Ultra:



Ultra  Electronics  is  an   internationally  successful  defence,   security, 
transport  and  energy  company  with  a  long,  consistent  track  record  of 
development  and  growth.  Ultra  businesses  constantly  innovate  to  create 
solutions to customer  requirements that  are different from  and better  than 
those of the Group's competitors. The  Group has about one hundred and  eighty 
distinct market or technology niches  within its twenty eight businesses.  The 
diversity of niches enables Ultra to contribute to a large number of platforms
and programmes and provides resilience to the Group's financial performance.



Ultra  has  world-leading  positions  in  many  of  its  niches  and,  as   an 
independent, non-threatening partner, is able to support all of the main prime
contractors with specialist capabilities  and solutions. As  a result of  such 
positioning, Ultra's systems, equipment or services are often mission-critical
to the successful operation of the platform to which they contribute. In turn,
this mission-criticality secures  Ultra's positions  for the  long term  which 
underpin the superior financial performance of the Group.



Ultra offers support to its customers through the design, delivery and support
phases of a  programme. Ultra  businesses have  a high  degree of  operational 
autonomy where  the  local  management  teams  are  empowered  to  devise  and 
implement  competitive  strategies  that  reflect  their  expertise  in  their 
specific niches. The  Group has a  small head office  and executive team  that 
provide to the individual businesses  the same agile, responsive support  that 
they  provide  to  customers  as  well  as  formulating  Ultra's  overarching, 
corporate strategy.



Across the Group's three  divisions, the major market  sectors in which  Ultra 
operates are:



Defence:  Ultra  supplies  advanced  electronic  and  electrical  systems  and 
equipment to coalition defence forces around the world. The Group innovates to
provide specialist capabilities that  are superior to  those available to  the 
enemy. By focusing  on delivering  comparative military  advantage, Ultra  can 
gain market share  and exploit the  headroom for growth  that is available  in 
defence budgets worldwide.



Security  and  cyber:  Ultra   provides  highly  differentiated  systems   and 
capabilities to the broad security,  intelligence and cyber market. Driven  by 
the actions of rogue states, terrorist groups and organised crime, governments
worldwide are focusing expenditure preferentially on addressing these threats.
Ultra has highly specialised  capabilities in secure communications,  networks 
and  high   grade  cryptographic   equipment,  key   management  systems   and 
surveillance and intelligence gathering systems.



Transport: Ultra provides specialist software,  systems and equipment for  use 
in mass passenger  transport systems. This  includes high integrity  real-time 
controls for civil  aircraft, advanced  IT solutions for  modern airports  and 
trackside power equipment  for transit rail  systems. Demand in  all areas  is 
driven by rising populations in affluent and developing regions of the world.



Energy: Countries around the world are  addressing the strategic need to  have 
secure access to increasing amounts of low carbon energy. Ultra has a range of
safety critical sensors and  controls used in existing  and new build  nuclear 
reactors. The Group has innovative portable energy sources powered by  readily 
available propane gas. Ultra also has specialist sensors, derived from defence
applications, which  are highly  effective in  the underwater  environment  at 
hydrocarbon mapping.

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IMSDELFFLFFXFBZ -0- Nov/16/2012 07:00 GMT
 
Press spacebar to pause and continue. Press esc to stop.