Ultra Electronics keeps costs down to offset UK defence cuts

Ultra Electronics expects a greater second-half weighting of defence orders and revenues despite uncertainties in the market.

The international defence, security, transport and energy company said it has kept a tight rein on costs to offset the effects of a tough economic climate.

The UK's Ministry of Defence budget remains subject to sequestration cuts of $43bn as the government struggles with its deficit.

"The group is maintaining its customary vigilance around cost control as individual businesses adjust to their market conditions," Ultra said.

"Restructuring has continued during the first half of 2013 and, as detailed in March, will include a £2.4m cost in the TCS radios business."

Net savings from the restructuring will accrue in the second half of the year.

The first half will reflect higher bid costs depending on the successful negotiation of a new programme in the Far East.

Ultra said its balance sheet was strong and there has been no significant change in its financial position since last month.

"The group is well positioned on new build and upgrade programmes that will serve to underpin growth into the medium term."

Shares rose 0.49% to 1,628p at 08:20 Friday.

RD