Ultra up 17% on submarine device sales

ULTRA ELECTRONICS, the defence and aerospace engineer, yesterday posted a 17 per cent jump in profits amid booming sales of submarine detection devices to the US navy.

Shares in Ultra have soared by 30 per cent over the last week after its US operations won contracts worth pounds 33m to supply the US navy with sonobuoys - floating sonar devices which can be ejected from aircraft.

Demand for the devices has started to approach Cold War levels as the US military has stepped up its submarine monitoring programme. Ultra has also won a pounds 6.2m contract to equip Korean destroyers.

Yesterday the shares eased 4.5p to 442p, valuing the company at pounds 290m, after jumping more than pounds 1 last week.

The market was surprised by the new contracts because most of the business was won by UnderSea Sensor Systems, an Indiana-based group bought by Ultra at the end of last year.

Ultra spent pounds 19m last year acquiring UnderSea and PMES, a Staffordshire- based supplier of sonobuoys. Both are expected to require substantial investment which will depress profits in 1999. But analysts believe the market for Ultra's products will stay robust. "More navies and airforces want to monitor submarines," said one analyst.

Ultra has also benefited from Airbus' success at the end of last year in beating Boeing to a giant contract to supply British Airways. Ultra supplies computer controls for landing gear on the Airbus 320 aircraft.

Ian Yeoman, Ultra finance director, said the new order had helped boost its deliveries to Airbus by 43 per cent, while the group had improved its profit margins.

Industry observers yesterday began to question the sustainability of the company's share rating. Tony Lancelott of Albert E Sharp, the investment house, said: "It is dangerous to be gung-ho about the prospects, especially given that the defence market is not exactly the most exciting there is."

Analysts yesterday nudged up their forecasts to predict earnings of pounds 25m to pounds 28m in 2000, putting the company on a forward p/e of over 15 - a hold, according to Albert E Sharp.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...