Ricardo sales are best for a year

Click to follow
The Independent Online

Ricardo, the automotive consultancy, reported a first-half loss yesterday but also said it had seen a pick-up in trading that would return it to the black in the second half.

Shares in the company closed up 14 per cent at 221.5p after it reported that January had been its best month in more than a year. It had previously said trading had improved in December, following a warning last autumn that customers were cancelling projects.

Ricardo serves the world's car manufacturers, which have had to cut costs severely. Ricardo cut 225 jobs in the six months to 31 December, taking a £1.7m charge with its interim results. The measure should lead to savings of £10m a year.

Rodney Westhead, the chief executive, said: "We are encouraged by the improvement in order intake in the past two months and the improved prospects pipeline, although it is too early to be confident that this trend will continue. Short-term trading will still take time to recover. However, these improvements suggest a return to profits in the UK during 2004."

The loss before tax was £2.7m for the interim period. Operating profit before tax, goodwill, exceptionals and interest was £100,000, compared with £6.8m profit the previous year. Mr Westhead said: "Our international businesses remain profitable, and with Ricardo's breadth of expertise in the key global automotive markets and reduced cost base, Ricardo is well placed to exploit opportunities as the market recovers."

Ricardo provides services such as engine testing and technical consultancy on new models, ahead of production.

Comments