The FTSE 250-listed engineering firm reported that underlying pre-tax profits for the six months ended 30 June were 6.7% higher at £46.5mln while revenues had jumped 10.4% to £387.1mln.
READ: Ultra Electronics higher again as JPMorgan Cazenove ups rating to ‘overweight’ from ‘neutral’ following 2018 results
Ultra’s order book had also increased by 4.6% in the period to £1.01bn.
Simon Pryce, the company’s chief executive, said that strong spending from the US defence sector and “increased demand” for the firm’s existing programmes had contributed to the improved performance, adding that the company was “confident” 2019 would be a year of good progress.
Pryce also said that the company had a “strong order book and positive momentum” going into the second half, while a number of “key new programme wins” were seen as having “significant long term potential”.
The numbers provided some extra charge to the shares, which were up 3% at 1,911p in early deals.
Broker hikes target price on “solid” first half
Analysts at Peel Hunt were also feeling more energetic as they hiked their target price to 2,050p from 1,700p and retained their ‘add’ rating on the stock.
In a note, the broker said the stronger end markets in defence were a “helpful backdrop” for the company to add value, particularly with Pryce, who became CEO of Ultra in June 2018, seeking to update the group’s IT systems and renew its focus on products and services.
Analysts also left their adjusted pre-tax profit forecast for the current year unchanged at £98.5mln, just a touch above consensus of £97.3mln.