Defence specialist Ultra Electronic Holdings was in optimistic mood yesterday after telling shareholders that trading for the first six months is in line with market expectations.
Despite adverse currency effects, Ultra, which has a major operation at Rugeley in Staffordshire, said margins were expected to be broadly similar as the group maintains its focus on achieving operational efficiencies.
In aircraft and vehicle systems, the buoyant civil aerospace market continues to drive revenue growth, which is also being boosted by customer-funded development programmes. Profit growth in the first half will reflect Ultra's investment in the wing ice protection system for Boeing's highly successful 787 aircraft, the group added.
Revenues in Ultra's information and power systems business in the half year has been affected by the timing of certain defence and security programme awards.
However, this effect has been largely offset by continuing strong growth of sales of airport IT systems and of Ultra's ADSI real time command and control system.
There was also a benefit from last year's restructuring of the group's transit power operations.
As expected the group's tactical and sonar systems arm notched up strong growth due to last year's acquisitions of Horizon Aerospace - now part of Flightline Systems - and Audio-pack, but also due to higher sales of tactical radios, mainly for the US Army and of torpedo defence systems for the Royal Navy.
In a trading update to the Stock Market, Ultra added: "Ultra's strong performance in the second half of 2005 will impact operating cashflow in the period, as will the group's continuing investment in the Boeing 787 and Airbus A400M programmes. The order book at the end of June is expected to show a significant increase from the value at the same time last year. This level of firm order cover continues to provide Ultra with high earnings visibility.
"The group has positions on a broad range of international programmes, none of which accounts for more than five per cent of revenues in any year. This spread of activities continues to underpin the resilience of Ultra's performance."
Ultra will report its interim results for the six months to June 30 on July 31.