Submarines keep Ultra Electronics profits above water

Defence-focused technology firm Ultra Electronics said sales to UK and US nuclear submarine programmes helped boost profits in the first half.

Underlying pre-tax profit rose 5% to £54.5m, pushing earnings per share up 6% to 58.1p.

Revenue was up 8% to £370.2m and the company declared an interim dividend of 12.2p, a 4% increase on the year before.

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Ultra was boosted by revenues of £155.2m - a 35% jump - at its Information & Power Systems division.

This was underpinned by sales of electrical power management and specialist control equipment for both UK and US nuclear submarine programmes, the company said.

This offset an 11% drop in revenues at its Aircraft & Vehicle Systems arm and a poor performance from the Tactical & Sonar Systems division, which it put down to reduced US demand for tactical radios.

Chief Executive Rakesh Sharma said the results reflected a steady performance in difficult conditions within Ultra's core defence markets.

"In the US, the forthcoming presidential election and the threat of sequestration combine to fuel funding uncertainties that will probably continue into 2013," he said.

"In the UK, the prolonged effort to balance the defence budget has led to uncertainty in the procurement process, with contract officers unwilling to commit funds and delaying programmes."