Ultra Electronics

LN: ULE

£1173.9m market cap

1590p last close

Ultra Electronics is a global aerospace and defence electronics company, with operations across three divisions: Aerospace & Infrastructure (26% of 2017 sales); Communications & Security (31%); and Maritime & Land (43%).

Investment summary

The overall picture of improving global defence spending supports a return to organic growth for UItra. This was already reflected in the uplift seen in the order book at the H118 report which continued into H218. The company is well positioned to leverage the growth in naval budgets and increased demand for military aircraft around the world. Ultra also has a significant role to play in commercial aerospace, energy and cyber markets. The company reports FY18 results on 6 March having maintained guidance in December .

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2016A 785.8 148.0 120.1 134.6 11.8 9.5
2017A 775.4 133.8 110.0 116.7 13.6 11.7
2018E 743.6 121.2 93.7 99.0 16.1 13.7
2019E 767.1 131.8 101.9 114.5 13.9 8.2
Last updated on 21/03/2019
Industry outlook

With defence drivers moving towards greater demand for electronic equipment and information management, Ultra is well positioned to benefit from more frequent upgrade cycles. In addition, it appears that defence spending may have turned a corner in the western world. Ultra stands to benefit from its diversified end-markets and order book visibility.

Last updated on 21/03/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 183.6
Forecast gearing ratio (%) 45
Price performance
%
1m
3m
12m
Actual 23.0 25.0 14.7
Relative* 20.3 14.1 11.2
52-week high/low 1743.0p/1232.0p
*% relative to local index
Key management
Douglas Caster Chairman
Simon Pryce CEO
Ami Sharma CFO
India Kalsi Head of Investor Relations

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