Ricardo orders rise but delays hit tech consulting arm

19th May 2014 09:54

Automotive and engineering consultancy Ricardo reported strong orders but said contract delays had hit its technical consulting arm.Ricardo, whose customers include the world's major car makers as well as energy companies, financial institutions and governments, said a good level of orders in April in the US had driven its order book at the end of April to £141m against £130m a year ago. The order intake in the 10 months to April was £215m compared to £186m a year earlier. Ricardo said potential business was looking encouraging with a number of projects for Chinese customers in the latter stages of negotiation and passenger car opportunities in the UK, US and Germany.Total group revenue in the 10 months to April was up 3% on the same period in the prior year and profit was tracking in line with full-year expectations.Ricardo's performance products arm continued to do well but third quarter revenue in its UK technical consulting division had been slightly lower than expected due to a delay of certain orders.The group also further underpinned its performance products business by signing a multi-year production supply agreement with an unidentified customer, with total revenue expected to be more than £35m, starting in 2015/16."In Germany and the US we are building momentum with the order book in each location significantly ahead of the prior year," the group said. Chief Executive Dave Shemmans said: "Overall, we remain confident of continued progress for the full year." Investec advised investors to 'buy' the shares with a price target of 800p, saying the £35m deal would help improve the group's longer-term earnings predictability.Shares were unchanged at 660p at 10:15 in London.PW