Higher US defence spending a boost for Ultra Electronics

Defence contractor Ultra Electronics on Thursday said it had “significant exposure” to a strengthening US defence budget, adding that it expected modest progress in underlying revenue and operating profit for 2018.

Full year revenue was expected to be more than £770m and underlying operating profit just over £120m, Ultra said.

It added that it had started the new year with an order cover on expected revenue of about 62%, higher than 56% last year.

Cash conversion is expected above 90% and follows the cash conversion of 92% for the year to December 2016.

“Order intake has continued to be strong at around £900m. The board remains minded to recommend a final dividend of 35p per share and will finalise this when the group announces its full year results,” the company said.