Follow Ricardo plc for regular updates25 February 2021
Ricardo plc - Interim Report for the six months ended 31 December 2020 (“HY 2020/21”)
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Highlights
- Trading in line with our expectations, with the business recovering from the impact of COVID-19;
- Order intake, revenue and operating profit have all increased on the six months to June 2020, albeit lower than HY 2019/20;
- Good performance in Energy & Environment and Rail, both delivering an increase in profits on HY 2019/20;
- Automotive market overall remains challenging, but is improving slowly with increased order intake in the US and China compared to the six months to June 2020;
- Performance Products deliveries in line with our expectations;
- Defense(1) fleet retrofit approaching contract award;
- Share placing completed, raising £28m, to reset the capital structure of the Group;
- Excluding the fund raise and adjusting items, underlying reduction in net debt of c.£3m for the period (increase in net debt of c.£5m after adjusting items); and
- Interim dividend of 1.75p declared.
| HY 2020/21 | HY 2019/20 | (Decline)/growth | |||
| Order intake (£m) | 181.1 | 208.6 | (13) | % | |
| Order book (£m) | 318.2 | 319.4 | - | % | |
| Revenue (£m) | 164.7 | 192.9 | (15) | % | |
| Underlying(2) | |||||
| - Operating profit margin (%) | 4.5 | 9.3 | (4.8) | pp | |
| - Profit before tax (£m) | 5.0 | 16.0 | (69) | % | |
| - Basic earnings per share(3) (p) | 6.8 | 23.0 | (70) | % | |
| Statutory | |||||
| - Operating profit margin (%) | 0.2 | 5.3 | (5.1) | pp | |
| - (Loss)/profit before tax (£m) | (2.1) | 8.3 | (125) | % | |
| - Basic (loss)/earnings per share (p) | (2.7) | 11.8 | (123) | % | |
| Underlying(2) cash conversion(4) (%) | 100.0 | 80.8 | 19.2 | pp | |
| Cash conversion(4) (%) | 100.0 | 78.5 | 21.5 | pp | |
| Net debt(5) (£m) | (50.4) | (73.8) | 32 | % | |
| Dividend per share (p) | 1.75 | 6.24 | (72) | % | |
| Headcount(6) (no.) | 2,878 | 3,058 | (6) | % | |
Commenting on the results, Dave Shemmans, Chief Executive Officer, said:
“The Group’s results were in line with our expectations in the first half of the year, and I am encouraged that the results show that we are starting to recover from the COVID-19 impacted low of the second half of FY 2019/20. There has been continued profit growth in Energy & Environment and Rail, and volumes in Performance Products have increased over the second half of FY 2019/20. Automotive & Industrial remains challenging, but we are seeing some green shoots of recovery. In Defense, we look forward to the ABS/ESC retrofit contract award in the second half of FY 2020/21.
“Whilst the economic outlook continues to remain uncertain, we have a robust order book, good pipeline of opportunities and our diversified business platform offers leading edge capabilities to support the global environmental agenda. We remain cautiously optimistic about the economic recovery and for further progress of the business as we deliver on our strategy.”
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