01 August 2023
Trading update FY22/23: Ricardo expects to report full year results in line with Board's expectations
Ricardo plc releases its pre-close trading update for the financial year ended 30 June 2023, ahead of its full year’s results presentation, scheduled for 13 September 2023.
The results in this trading update are subject to audit.
Ricardo expects to report full-year results trading in line with expectations
In the year ended 30 June 2023, Ricardo has continued to trade in line with the Board’s expectations delivering a strong full-year performance with growth in orders, revenue and underlying operating profit compared to the prior year. The robust performance reflects the strong order intake in the period, with orders of c.£520m and 17% revenue growth (13% on a constant currency basis). All figures are on a continuing operations basis.
We continue to progress our portfolio transition. Our Environmental and Energy Transition portfolio, which is expected to deliver higher growth and margin over the long term, has performed well, delivering double-digit revenue growth and strong margin accretion. As reported in our half-year results, our Established Mobility portfolio has continued to deliver order and revenue growth. However, underlying operating profit has declined year-on-year as a result of the performance of our Established Automotive and Industrial business.
Environmental and Energy Transition portfolio
- Energy & Environment continues to see significant demand across its growth solutions, with strong order, revenue, and margin growth.
- In Rail, revenue and profit are down year-on-year, as expected, because of the timings of several large contracts that came to an end in FY21/22. However, the good order backlog and strong pipeline creates confidence that Rail can return to revenue growth in FY23/24
- Emerging Automotive & Industrial delivered good revenue and profit growth in the year. Looking forward, reflecting the timing of automotive energy-transition programmes, we expect short-term fluctuations in order intake.
Established Mobility portfolio
- Strong growth in orders, revenue and profit in our Defense business continues, as it ramps up the volume of its ABS supply and accelerates its orders for services
- Performance Products delivered good order and revenue growth, despite volume challenges within a key contract.
- Established Automotive & Industrial revenues and profit declined, which resulted in the structural changes announced in the first half. These were implemented in H2 22/23, and we expect performance to improve in FY23/24.
At 30 June 2023, net debt was £62m compared to £35m at 30 June 2022, which is in line with the Board’s expectations following the acquisitions of both E3-Modelling and Aither Pty Ltd, earlier in the year. Given the increase in base rates over recent months, we expect finance charges to be higher in FY23/24.
As previously announced, Judith Cottrell joined Ricardo on 1 July 2023 and will take over from Ian Gibson as Chief Financial Officer during September 2023
Graham Ritchie, Chief Executive Officer, commented:
“In May 2023, we communicated the progress that we are making towards delivering our strategy and accelerating growth to become a global consultancy leader in environmental and energy transitions. Throughout FY22/23, we have continued to transform our portfolio mix to deliver long-term profitable growth and consistently perform in line with our expectations.
I look forward to providing you with more details when sharing our preliminary results on 13 September 2023.”
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