Pre Close Trading Statement June 2015

24 JUNE 2015

Ultra, the international defence, security, transport and energy group, today issues a Pre Close Trading Statement, ahead of its Interim Results for 2015.

Overall, conditions in Ultra’s markets remain as noted on 2 March 2015 in the 2014 preliminary results announcement and expectations for the full year remain unchanged. We continue to anticipate that performance will be more weighted toward the second half.

As anticipated, the uncertainty surrounding the US fiscal year 15/16 budget and the potential of a Continuing Resolution in relation to Government appropriations continues to impact US defence revenues. Further, recent challenges to the Patriot Act are impacting revenues from our US Sotech business and as previously advised, the Oman contract termination is impacting cash. Despite the headwinds, order intake for the first half is expected to result in a book to bill ratio close to one and our recent acquisitions are performing well.

Ultra’s balance sheet remains strong. The acquisition of the Electronics Products Division of Kratos for up to $265m announced on 1 June 2015 is to be financed using Ultra’s existing facilities and a new term loan. The transaction will be earnings accretive during the first full year. Net debt/EBITDA following the transaction will be within Ultra’s guided range and is expected to be comfortably below 2x by 2016 financial year end. There have been no other significant changes to the financial position of the Group from that reported on 2 March 2015.

Ultra will make its interim results announcement for the six months ending 30 June 2015 on 3 August 2015.

Notice of Capital Markets Event:
New Organisational Structure & Update on Business Efficiencies Initiative

Ultra is today holding an investor and analyst event to explain new market segmentation and divisional reporting structures as well as details of its Standardisation & Shared Services initiative. A copy of the slides and script being presented will be placed on the Group’s website.

  • The business activities within Ultra have been segmented to better reflect the markets that the Group addresses. We have identified eight market segments: Aerospace; Communications; C2ISR; Infrastructure; Land; Maritime; Nuclear and Underwater Warfare. The Group’s Cyber capability will run across all these segments.
  • The Group’s business reporting lines have been changed to be consistent with the market facing segments and the divisions renamed: Aerospace & Infrastructure; Communications & Security and Maritime & Land. The Group will report against these Divisions from the 2015 Interim Results.
  • The Group continues its focus on business efficiencies and today outlines further details of the group-wide initiative to standardise systems and some processes to drive business efficiency. It is estimated that the total project costs of about £30m over three years will generate enduring annual efficiency savings of about £20m. The savingsrealised will be deployed to self-fund the programme from 2016 to 2018, increaseinvestment in R&D, increase competitiveness and improve profits in the medium term.There will be an initial one-off non-underlying cost of up to £5m in 2015, of whicharound half will be cash, to cover the programme set-up.


Ultra Electronics Holdings PLC 
Rakesh Sharma, Chief Executive
Mary Waldner, Group Finance Director      
+44 20 8813 4300

Susan McErlain, Corporate Affairs Director 
+44 7836 522722

MHP Communications
James White 
+44 20 3128 8756