Trading update - trading in line with our expectations for year ended 30 June 2022

Trading in line with our expectations

In the year ended 30 June 2022, Ricardo traded in line with the Board’s expectations and delivered a full year performance with a very good level of new orders and strong operating cash generation.
 
FY 2021/22 saw high levels of growth with positive momentum, owing to a strong order intake at c.£430m, up over 20% on the prior year. We enter the new financial year with a good order book of c.£340m, up over 15% on the prior year. Net debt at 30 June 2022 was £35m (including the £5m cost of the acquisition of Inside Infrastructure in March 2022) compared to £47m at 30 June 2021.

Within our business segments

Strong growth across the Energy & Environment (‘EE’) business was supported by a number of significant contract wins for its growing portfolio of sustainability services and a higher demand for environmental consultancy services within the corporate decarbonisation and water segments.

Automotive and Industrial returned to profitability with a strong rebound in order intake and revenue. We saw growth in order intake in North America and EMEA and we continue to win major contracts in supporting our customers with the rapid shift to decarbonised and sustainable transport solutions.

Rail increased its order intake, driven by new contract wins, specifically within certification services and through its recent expansion into North America. Overall, revenue was slightly down on the prior year, impacted by global market conditions together with some long-term projects nearing completion.

Performance Products delivered a good performance, reflecting strong demand for engine and transmission products from key customers such as McLaren, Porsche, and Aston Martin, while also extending several key motorsport programmes including Formula E, Formula 1, and World Rally Championship.

Defense received a good level of orders which included a $19m order from the US Army for Antilock Brake System/Electronic Stability Control (ABS/ES) retrofit kits. Revenue showed double digit growth year-on-year, driven by both the ABS programme and engineering services.

Continued strong cash generation 

At 30 June 2022, net debt was £35m compared to £47m at 30 June 2021 and £39m at 31 December 2021. The reduction in net debt has been achieved through a combination of the profits generated in the year and strong working capital management. In March 2022, Ricardo paid £5m to acquire Australia-based Inside Infrastructure.
 

Graham Ritchie, Chief Executive Officer, commented

I am delighted that, over the course of the year, we have continued to deliver in line with our expectations. We have made significant progress in FY21/22, delivering a very good financial performance with increased order intake across all our business segments and a strong operating cash conversion.
 
Since joining the Group in October 2021, I have completed a thorough review of the business and recently launched our sharpened strategy, shaping Ricardo’s future to become a leading environmental and energy-transition consultancy.
 
We will achieve this by establishing a clear focus that prioritises high-growth and high-margin solutions and by being rigorous and disciplined in our execution. By doing so, we aim to deliver sustainable and profitable growth, creating value for our shareholders, our colleagues and our customers.

This is an exciting time for Ricardo.
 

About Ricardo plc

Ricardo plc is a global strategic, environmental, and engineering consulting company, listed on the London Stock Exchange. With over 100 years of engineering excellence and employing close to 3,000 employees in more than 20 countries, we provide exceptional levels of expertise in delivering innovative cross-sector sustainable outcomes to support energy transition and scarce resources, environmental services together with safe and smart mobility. Our global team of consultants, environmental specialists, engineers and scientists support our customers to solve the most complex and dynamic challenges to help achieve a safe and sustainable world. Visit www.ricardo.com
 
This announcement is released by Ricardo plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR. 

Enquiries:  

Natasha Perfect
Ricardo plc
Tel 01273 455 611
natasha.perfect@ricardo.com
 
Elisabeth Cowell
SECNewgate
Tel 020 757 6882
ricardo@secnewgate.co.uk