Ultra Electronics shares dive on chief’s exit and profits warning
The FTSE 250 firm dropped more than 20% on the London Stock Exchange.
Shares in Ultra Electronics have tanked after the defence firm warned over profits and its chief executive stepped down.
The FTSE 250 firm, which dropped more than 20% on the London Stock Exchange (LSE), said it was searching for a new top boss, with CEO Rakesh Sharma departing and chairman Douglas Caster becoming the group’s executive chairman.
In a double announcement, the company said annual revenues would come in at £770 million and underlying operating profit at £120 million, with consensus previously pointing to figures of £807 million and £132 million respectively.
Ultra blamed the move on the Ministry of Defence (MoD) “pausing, cancelling or delaying numerous programmes”, which had hit company orders.
Updating the market, the defence-to-energy firm said: “The majority of the group’s markets have been satisfactory; however, the UK market has been difficult and has become increasingly so in the second half.
“There are mounting pressures in the funding of UK defence programmes and this has resulted in the UK MoD pausing, cancelling or delaying numerous programmes.
“Within the last few weeks a number of our UK orders budgeted for 2017 have been affected.”
On a brighter note, the company said its 2018 order book on a constant currency basis was 20% higher at the end of October compared with last year.
Focusing on the chief executive’s departure, Mr Caster said: “Throughout his 28 years of service to Ultra, Rakesh has contributed significantly to the group’s development into an international provider of specialist capabilities with positions on a broad number of platforms and programmes.
“While the UK defence market is difficult, defence spending in the US, the group’s largest market, is increasing.
“The board is focused on identifying the right leader to deliver shareholder value through a renewed focus on organic performance in the next stage of the group’s development.”