31 July 2024
Ricardo plc: Trading Update
Ricardo plc ("Ricardo"), a global strategic environmental and engineering consulting company, providing expertise at the intersection of transport, energy, and climate agendas, today announces its pre-close trading update for the financial year ended 30 June 2024, ahead of its full year results, scheduled for 11 September 2024.
The results in this trading update are subject to audit.
Guidance reaffirmed for full year 23/24
For the year ended 30 June 2024, Ricardo has continued to trade in line with the Board's expectations and expects to deliver underlying profit before tax in line with its previous full year guidance.
FY23/24 saw a strong recovery in profit in the second half, with improved operational efficiencies following the consolidation of the functional teams. Revenue was up by 7% (9% on a constant currency basis). Order intake for the Group was approximately £495 million, down 5% on the prior year (3% on a constant currency basis). This primarily reflects the new programme wins in the prior year in Performance Products and the timing of large orders in Automotive & Industrial.
Ricardo enters the new financial year with a robust order book and solid pipeline visibility. Net debt at 30 June 2024 was £59.6 million, including the £13.6 million cash outflow for the earn out payments relating to the acquisitions of E3M and Aither, both of which performed at maximum potential following their successful integrations into the Group.
Good sales momentum across all business units
· Energy and Environment continued to show good momentum across its practices except for its water advisory services, where performance was tempered by project disruptions in end markets.
· Rail continues to deliver positive growth momentum and has executed consistently against its order book.
· Automotive and Industrial delivered strong profit growth in the second half in both its Emerging and Established businesses. Whilst the order book was marginally lower than June 2023, the amount deliverable within 12 months remains consistent with the prior year, and revenue confidence for next year is boosted by improved pipeline visibility.
· Performance Products delivered strong profit in the second half, benefitting from a ramp to complete customer transmission projects. We expect growth to moderate in FY24/25 following the completion of a couple of large programmes.
· Defense has continued to deliver in the second half of FY23/24 at a similarly strong level to that seen in the first half, driven by strong order delivery of the Antilock Brake System Electronic Stability Control (ABS/ESC) programme, which is expected to complete in September 2027.
Strong cash generation
As a result of the Group's persistent and rigorous focus on working capital management, cash generation for the full year continues to deliver strong returns delivering unaudited net debt of £59.6 million. This includes £13.6 million for the earn out payments relating to the acquisitions of E3M and Aither, and £5.4 million for costs incurred in accelerating our functional operating model announced at the half year."
Graham Ritchie, Chief Executive Officer, commented:
"We are pleased with our continued progress in the second half of FY23/24, trading in line with the Board's expectations for the full year. At the same time, we are accelerating our strategic execution by delivering the aligned functional operating model and improving our visible pipeline for future revenue growth. We enter the new year with a solid order book as we continue to focus on delivering long-term and sustainable growth."
FY23/24 results
Ricardo will publish its results for the year ending 30 June 2024 on Wednesday, 11 September 2024.
About Ricardo plc
Ricardo plc is a global strategic, environmental, and engineering consulting company, listed on the London Stock Exchange. With over 100 years of engineering excellence and close to 3,000 employees in more than 20 countries, we provide exceptional levels of expertise in delivering innovative cross-sector sustainable outcomes to support energy transition and scarce resources, environmental services together with safe and smart mobility. Our global team of consultants, environmental specialists, engineers and scientists support our customers to solve the most complex and dynamic challenges to help achieve a safe and sustainable world. Visit www.ricardo.com
Enquiries:
Judith Cottrell | Natasha Perfect
Ricardo plc
Tel 01273 455 611
Elisabeth Cowell | Ian Silvera
SECNewgate
Tel 020 757 6882
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