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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ultra Electronics Holdings Plc | LSE:ULE | London | Ordinary Share | GB0009123323 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 3,500.00 | 3,496.00 | 3,498.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMULE
RNS Number : 0133M
Ultra Electronics Holdings PLC
25 April 2018
25 April 2018
Ultra Electronics Holdings plc
("Ultra" or "the Group")
Dissemination Announcement
Ultra announces the dissemination of its Annual Financial Report for the year ended 31 December 2017. A preliminary announcement of the Group's results was made on 5 March 2018.
The Group's 2017 Annual Financial Report and the Notice of Annual General Meeting 2018 were published on Ultra's website www.ultra-electronics.com on 21 March 2018. The Annual General Meeting will be held at 10.00 a.m. on 27 April 2018 at Ultra Electronics, 417 Bridport Road, Greenford, Middlesex, UB6 8UA.
These documents are available for inspection on the National Storage Mechanism (NSM), found online at www.morningstar.co.uk/uk/NSM.
In compliance with DTR 6.3.5, the following information is extracted from the 2017 Annual Financial Report and should be read together with Ultra's Final Results announcement issued on 5 March 2018 which can be found at http://www.ultra-electronics.com/investors/ir-home.aspx. Together these constitute the information required to be communicated to the media in unedited full text through a Regulatory Information Service. This information is not a substitute for reading the full 2017 Annual Financial Report.
- Ends -
For further information contact:
Ultra Electronics Holdings plc
Cherise Trumper, Company Secretarial Assistant +44(0)20 8813 4313
Ultra Electronics Holdings plc
("Ultra" or "the Group")
RISKS AND UNCERTAINTIES
Hot Features
Premium
Risk 1. Growth Trend: No signi cant change
----------------------------------- --------------------------------- -------------------------------------
Changes during 2017
Although the defence market has been challenging in recent years, there
are strong indications of a return to growth, particularly in the US,
as indicated by the Group's strong order book going into 2018. Political
and economic circumstances in some of the Group's key markets mean that
it is cautiously optimistic about any return to organic growth. The Company's
focus in the year continued to be on its market-facing segment strategies,
improving its planning for future political and economic developments
in its key markets, and exploiting the anticipated market upturn.
-------------------------------------------------------------------------------------------------------------
Description Potential impact of failure: Mitigations (examples):
Ultra's strategic objective -- Poor investment decisions -- The Group is offsetting
for year on year growth leading to inadequate challenges in the UK defence
requires: the ability returns market by expanding in
to respond to changing -- Reduced business opportunity targeted overseas regions
market dynamics; the capacity and loss of reputation, that exhibit long term
to win new business and customers, market share, growth characteristics
deliver successfully against revenue and pro t -- The market-facing segments
contracted customer requirements; -- Specialist capabilities enable Ultra to remain
the development of highly eroded through commoditisation competitive and use the
differentiated solutions -- Reduction in anticipated capabilities of its businesses
to address customer needs; acquisition value through to deliver enhanced solutions
and the ability to select, overpayment, non-delivery more effectively to its
execute and integrate of synergies and/or economies customers
acquisitions effectively. of scale and senior management -- Improving the capacity
focus diverted away from and capability of the
delivering "business as Group's sales and marketing
usual". teams using the LAUNCH
approach and providing
training
-- Establishment and implementation
of rigorous gate reviews
of risk appetite for major
opportunities so that
acceptable margin levels
and risk tolerances are
maintained
-- The Board conducts
a rigorous review of acquisition
opportunities including
commissioning third party
market reports and due
diligence. Post-acquisition
reviews are performed
on all acquisitions comprising
integration effectiveness,
operational performance
compared to expectation
and lessons learned
-- A working group reporting
to the Executive Team
has been established to
evaluate the impact of
recent geo-political events
on Ultra.
----------------------------------- --------------------------------- -------------------------------------
Risk 2. Delivering change Trend: No significant
change
--------------------------------- ---------------------------------- ---------------------------------
Changes during 2017
The scale and complexity of change has increased as S3 initiatives and
business consolidations take effect. S3 has adopted a multi-faceted and
proactive communication strategy and recruited specialist skills to augment
Group talent in key roles.
--------------------------------------------------------------------------------------------------------
Description Potential impact of failure: Mitigations (examples):
Effective delivery of -- Expected bene ts of -- An Executive Team sponsor
major change programmes change not realised is allocated to all major
with minimal effect on -- Signi cant increase change programmes which
business as usual is a in change programme costs are also monitored on
key component of Ultra's -- Senior management distraction a monthly basis by the
continual drive for operational from business as usual Board
improvement. -- Reduction in employee -- Recommendations arising
morale from the deep dive review
-- Disruption of business and external review conducted
performance. in 2017 are being considered
for implementation
-- An S3 steering committee,
chaired by the Group Finance
Director, meets monthly
to track progress against
the plan
-- An S3 Communications
Manager has been recruited
with responsibility for
implementing the communications
strategy approved by the
S3 steering committee
--------------------------------- ---------------------------------- ---------------------------------
Risk 3. People and culture Trend: No significant
change
---------------------------------------- ----------------------------------- ----------------------------------
Changes during 2017
Ultra's culture and how this is re ected across its businesses has been
the subject of discussion at both the Board and Executive levels, especially
in the last quarter of 2017. Talent and succession planning remained
a focus for the Executive Team in 2017 and remains on the Board's agenda
as an area of focus in 2018.
-----------------------------------------------------------------------------------------------------------------
Description Potential impact of failure: Mitigations (examples):
Preserving Ultra's culture -- Not recruiting and -- Ultra continues to
(underpinned by its behaviours retaining the right employees engage in a number of
of LEAP: leadership, entrepreneurship, in the right roles would initiatives with local
audacity and paranoia) result in Ultra being schools, colleges and
and attracting, developing unable to ful l its contractual universities to gain access
and retaining the right obligations and would to the best people for
people who have the domain lead to operational inef its apprenticeship and
expertise and who embrace ciencies and loss of productivity graduate recruitment programmes.
Ultra's culture is critical -- Staff morale could This enables Ultra to
to the Group's strategic be impaired resulting grow a broad range of
objectives. in a rise in employee skills and capabilities
related issues (e.g. grievances and to remain successful
and sickness) at innovating to meet
-- Failure to maintain customers' needs -- Ultra's
a strong ethical culture people and their development
would increase the Group's are fundamental to Group
exposure to legal and success. Employee development
regulatory breaches. needs form part of performance
and development reviews
and are aligned to employees'
speci c needs
-- Employee engagement
and morale is measured
through YOURviews surveys.
The leadership teams in
the businesses use the
survey to address any
areas of concern so that
Ultra's people remain
engaged and committed
-- Talent and succession
planning has been, and
will continue to be, a
focus for the Board
-- The annual Organisation,
Succession & Development
Plan (OSDP) results in
highpotential employees
being identi ed and their
development monitored.
---------------------------------------- ----------------------------------- ----------------------------------
Risk 4. Information management Trend: No significant
and security change
---------------------------------- ------------------------------------ ------------------------------
Changes during 2017
The CORVID Protect and Ultra approach to security provide a high level
of assurance. The global increase in the incidence and sophistication
of cyber security crime means this risk continues to be a priority for
the Company. As such, this risk was the subject of a deep dive review
in 2017.
--------------------------------------------------------------------------------------------------------
Description Potential impact of failure: Mitigations (examples):
The incidence and sophistication -- Reduced product differentiation -- The Group's information
of cyber security crime caused by loss of intellectual security is provided through
continues to rise. The property its continued investment
effective management and -- Reputational damage in Ultra's Cyber Protection
protection of information to Ultra as a highly regarded Group (part of CORVID
and Ultra's IT systems provider of secure data Protect). It provides
is necessary to prevent systems Group-wide monitoring,
the loss of data and the -- Loss of business opportunity incident response and
disruption of operations. with removal of government continued enhancement
approval to work on classi of Ultra's IT systems
ed programmes and processes
-- Disruption of business -- The Board is kept updated
activity as systems are on how CORVID Protect
cleansed and restored secures Ultra's network,
including protecting Ultra
from phishing attacks
-- The Group's Information
Security Policy is being
updated to re ect GDPR
-- Recommendations arising
from the deep dive review
have been implemented
-- Intellectual property
is addressed in the bid
and contract management
process and protected
through information security
-- Security clearance
processes are in place
for all employees
-- Established physical
security processes are
implemented at all sites.
---------------------------------- ------------------------------------ ------------------------------
Risk 5. Supply chain Trend: No significant
change
----------------------------------- ------------------------------ --------------------------------------
Changes during 2017
The level of risk remains unchanged in the year.
-----------------------------------------------------------------------------------------------------------
Description Potential impact of failure: Mitigations (examples):
The Group relies upon -- Failure to deliver -- Using the visibility
suppliers and subcontractors against customer commitments created by S3 deliverables
to deliver upon its customer -- Reduced pro t margins to consolidate the supply
commitments. Ultra's supply and increased contractual chain and to leverage
chain needs to be ef cient disputes and litigation the commercial scale of
to maintain margins and -- Loss of reputation the Group
to be compliant with legislation. and investor con dence. -- Building ongoing partnerships
The Group's manufacturing with strategic suppliers
facilities are exposed and managing major supplier
to natural catastrophe risks and issues (including
risks and the Group is single source arrangements)
exposed to social, economic, through the bid management
regulatory and political and contract management
conditions in the countries policies
in which it operates. -- Establishment of regional
procurement councils to
target the optimisation
of Ultra's supply chain
for Direct Procurement
-- The Board's commitment
to compliance with the
Modern Slavery Act 2015
is contained in the Anti-Slavery
and Human Traf cking Statement
(www.ultra-electronics.com/
investors/anti-slavery-and-humantraf
cking-policy.aspx)
-- Business continuity
and disaster recovery
plans are in place
-- The Group has business
interruption, property
damage, professional indemnity
and product liability
insurance.
----------------------------------- ------------------------------ --------------------------------------
Risk 6. Governance and internal Trend: No significant
controls change
---------------------------- --------------------------------- ---------------------------------
Changes during 2017
Ultra does not consider that the level of risk has changed in the year
even though the role of Chairman and Chief Executive is being by the
Group's Executive Chairman until a new Chief Executive is appointed.
This is due to the effectiveness of existing controls, ongoing mitigations
and the broader perspective provided by the appointment of two new Non-Executive
Directors in 2017.
--------------------------------------------------------------------------------------------------
Description Potential impact of failure: Mitigations (examples):
Maintaining corporate -- Signi cant nancial -- The Group Operating
governance standards as loss (e.g. fraud, theft, Manual (GOM) and Risk
well as an effective risk material errors) Management Framework provides
management and internal -- Loss of reputation clear instructions on
control system is critical and investor con dence the Group's internal governance
to supporting the delivery -- Loss of business opportunity and controls
of the Group's strategy. with removal of government -- The businesses provide
approval to work on classi year end disclosures on
ed programmes. the effectiveness of their
accounting and internal
control systems
-- Internal Audit conducts
an audit of the Group's
internal control system
-- The terms of reference
for the Board and committees
are reviewed and updated
annually
---------------------------- --------------------------------- ---------------------------------
Risk 7. Pensions Trend: Decreased risk
------------------------------- ------------------------------- --------------------------------
Changes during 2017
Following the closure of the pension scheme to future accruals in 2016,
the pension scheme has increased the hedging of its liabilities. This
risk has therefore reduced.
--------------------------------------------------------------------------------------------------
Description Potential impact of failure: Mitigations (examples):
The Group's UK de ned -- Any increase in the -- Annual accounting and
bene t pension scheme de cit may require additional triennial pension valuations
needs to be managed to cash contributions and are in place and any issues
ensure it does not become thereby reduce the available that may arise are highlighted
a serious liability for cash for the Group. to the Board
the Group. There are a -- The pension scheme
number of factors including de cit decreased during
investment returns, long-term 2017 due to improved asset
interest rate and price performance and following
in ation expectations, the closure of the Group's
and anticipated members' UK de ned bene t pension
longevity that can increase scheme to future accrual
the liabilities of the in 2016
scheme. -- The Pension Trustees
and the Company actively
consider pension risk
reduction activities such
as liability matching,
dynamic de-risking, pension
increase exchange and
retirement transfer options
-- The Pension Trustees
and the Company agreed
to increased hedging of
the scheme's liabilities
-- The Board undertakes
regular Pension Strategy
Reviews
-- Recommendations arising
from the deep dive review
conducted in 2017 have
been implemented.
------------------------------- ------------------------------- --------------------------------
Risk 8. Legislation/regulation Trend: Increased Risk
--------------------------------- -------------------------------- -----------------------------------
Changes during 2017
The Company continues to take compliance very seriously and the Board
and Executive Team strive to reinforce an ethical culture. For example,
the Group provided additional targeted training to certain groups of
employees on anti-bribery and managing agents. Ultra is proactively working
towards GDPR compliance and has employed legal advisers to help with
achieving compliance in this and other legislative and regulatory changes.
The overall level of risk may increase due to various changes in legislation
and regulation.
--------------------------------------------------------------------------------------------------------
Description Potential impact of failure: Mitigations (examples):
The Group operates in -- Failure to comply with -- The Group Operating
a highly regulated environment legislation and regulations Manual is well established
across many jurisdictions could result in nes and and policies and procedures
and is subject to regulatory penalties and/or the debarment are regularly updated
and legislative requirements. of the Group from government to re ect changing legislative
There is a risk that the contracts and regulatory requirements
Group may not always be -- Reduced access to export -- Regular compliance
in complete compliance markets could have a material training is undertaken
with laws, regulations adverse effect on the as part of Ultra's commitment
or permits. Export restrictions Group's future revenue to an ethical culture
could become more arduous and pro t and individual businesses
and factors outside of -- Loss of reputation provide compliance statements
Ultra's control could and investor con dence. as part of monthly business
result in the Group being performance reporting
unable to obtain or maintain -- The Ethics Overview
necessary export licences. Committee provides independent
advice and scrutiny of
Ultra's business activity.
It provides assurance
to the Board that the
Group's undertakings are
transparent and conducted
ethically within the legislative
environment
-- Employees have access
to a Group-wide con dential
hotline to report anonymously
any concerns they may
have about possible improprieties
and other compliance issues
-- The Board receives
regular updates and presentations
on the Company's legal
and regulatory requirements
-- A project has been
established to evaluate
the impact of the GDPR
and to ensure that Ultra
is compliant with the
regulation
-- External advice has
been sought on the impact
of recent changes to the
US tax regime on Ultra.
--------------------------------- -------------------------------- -----------------------------------
Risk 9. Health, safety and environment Trend: No significant
change
------------------------------- ------------------------------- --------------------------------
Changes during 2016
Ultra has strong HS&E processes and procedures. The Board has zero appetite
for HS&E reportable incidents. The number of lost time accidents per
100,000 hours reduced in 2017 and the reportable/ recordable accident
rate per employee remained unchanged.
--------------------------------------------------------------------------------------------------
Description Potential impact of failure: Mitigations (examples):
Ensuring high standards -- Incidents may occur -- The Board has zero
of health and safety of which could result in appetite for HS&E risk
employees and visitors harm to employees and and the Group's leadership
and maintaining commitment visitors, the temporary is committed to ensuring
to minimise the environmental shutdown of facilities that this remains a top
impact of activities is or other business disruption priority. Any material
of paramount importance -- The Group may be exposed incidents are reported
to the Company. to regulatory action and to the Board along with
nancial loss a correction or mitigation
-- Loss of reputation plan
and investor con dence. -- Near miss reporting
has been introduced in
order for Ultra to be
proactive in identifying
and taking action on early
warning indicators to
prevent serious injury
or fatality
-- The Board undertakes
an annual review of HS&E
and the Executive Team
reviews HS&E on a quarterly
basis. Each business conducts
an annual HS&E self-assessment
in addition to a biannual
external audit.
------------------------------- ------------------------------- --------------------------------
RELATED PARTY TRANSACTIONS
Remuneration of key management personnel
The remuneration of key management personnel, which includes the Directors of the Group, is set out below in aggregate for each of the categories specified in IAS 24: Related Party Disclosures. Further information about the remuneration of individual Directors is provided in the audited part of the Directors' Remuneration Report on pages 78-91.
2017 2016
GBP'000 GBP'000
-------------------------- --------- ---------
Short-term employee
benefits 3,428 4,628
-------------------------- --------- ---------
Post-employment benefits 425 410
-------------------------- --------- ---------
Share-based payments 2,592 1,042
-------------------------- --------- ---------
6,445 6,080
-------------------------- --------- ---------
Statement of going concern
Ultra's net debt at 31 December 2017 was GBP74.5m. The Group's committed banking facilities amount to GBP466.3m in total, together with a GBP5.0m and $10.0m overdraft. The Group's revolving credit facility of GBP300m is denominated in Sterling, US Dollars, Canadian Dollars, Australian Dollars or Euros. This facility was signed in November 2017, and replaces the previous GBP100m and GBP200m revolving credit facilities. The facility is provided by a group of six international banks and has a committed maturity of ve years to November 2022, and may be extended to a maximum of seven years subject to lender consent. The facility agreement permits an additional GBP150m 'accordion' which is uncommitted and subject to lender consent and can be used in certain acquisition scenarios.
The Group also holds a $225m term loan which was established in May 2015. This loan, denominated in US Dollars, was drawn in full in August 2015 to complete the Herley acquisition. $60m is repayable in late 2018 and the loan expires in August 2019. The Group also has loan notes in issue to Pricoa which totalled $70m at 31 December 2017 (2016: $70m). $10m will be repaid on 14 July 2018 and the remaining $60m will be repaid on 25 January 2019. As well as being used to fund acquisitions, the nancing facilities are also used for other balance sheet and operational needs, including the funding of dayto-day working capital requirements. The US Dollar borrowings also represent natural hedges against assets denominated in that currency. Details of how Ultra manages its liquidity risk can be found in note 22 - Financial Instruments and Financial Risk Management.
Though global macro-economic conditions remain uncertain, and there continues to be uncertainty over the future landscape due to Brexit, the long-term nature of Ultra's business and its positioning in attractive sectors of its markets particularly in defence and aerospace which are long-term in nature, taken together with the Group's forward order book, provide a satisfactory level of con dence in respect of trading in the year to come. The Directors have a reasonable expectation that the Group has adequate resources for a period of at least 12 months from the date of approval of the nancial statements and have therefore assessed that the going concern basis of accounting is appropriate in preparing the nancial statements and that there are no material uncertainties to disclose.
Directors' responsibilities statement
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors are required to prepare the Group financial statements in accordance with IFRSs as adopted by the European Union and Article 4 of the International Accounting Standards Regulation (IAS) and have elected to prepare the Company's financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) including FRS 101. Under company law, the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs and of the profit or loss of the Company, as well as the undertakings included in the consolidation for that period.
In preparing the Company's financial statements, the Directors are required to:
-- Select suitable accounting policies and then apply them consistently
-- Make judgements and accounting estimates that are reasonable and prudent
-- State whether applicable UK Accounting Standards have been followed subject to any material departures disclosed and explained in the financial statements
-- Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
In preparing the Group financial statements, International Accounting Standard 1 requires that Directors:
-- Properly select and apply accounting policies
-- Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information
-- Provide additional disclosures, when compliance with the specific requirements in IFRS are insufficient, to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance
-- Make an assessment of the Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website (www.ultra-electronics.com). Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
We confirm that, to the best of our knowledge, taken as a whole:
-- The financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole
-- The Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation, together with a description of the principal risks and uncertainties that they face
-- The Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.
The Annual Report (including the Strategic Report and Directors' responsibilities statement) on pages 6-94 was approved by the Board on 5 March 2018 and signed on its behalf by:
Douglas Caster, Executive Chairman
Amitabh Sharma, Group Finance Director
About Ultra
Ultra Electronics is an internationally successful defence, security, transport and energy company with a long track record of development and growth. Ultra and Ultra's subsidiaries and subsidiary undertakings (the "Ultra Group") manage a portfolio of specialist capabilities generating innovative solutions to customer needs. Ultra applies electronic and software technologies in demanding and critical environments ranging from military applications, through safety-critical devices in aircraft, to nuclear controls and sensor measurement. These capabilities have seen the Ultra Group's highly-differentiated products contributing to a large number of platforms and programmes.
Ultra has world-leading positions in many of its specialist capabilities and, as an independent, non-threatening partner, is able to support all of the main prime contractors in its sectors. As a result of such positioning, Ultra's systems, equipment or services are often mission or safety-critical to the successful operation of the platform to which they contribute. In turn, this mission-criticality secures Ultra's positions for the long-term which underpins the superior financial performance of the Ultra Group.
Ultra offers support to its customers through the design, delivery and support phases of a programme. Ultra businesses have a high degree of operational autonomy where the local management teams are empowered to devise and implement competitive strategies that reflect their expertise in their specific niches. The Ultra Group has a small head office and executive team that provide to the individual businesses the same agile, responsive support that they provide to customers, as well as formulating Ultra's overarching, corporate strategy.
Across the Ultra Group's three divisions, Ultra operates in the following eight market segments:
* C2ISR
* Aerospace --
* Nuclear
* Land --
* Infrastructure --
* Communications --
* Maritime -- * Underwater Warfare
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACSSEESIIFASELL
(END) Dow Jones Newswires
April 25, 2018 02:01 ET (06:01 GMT)
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