British military engineering form Ultra Electronics Holdings PLC said full-year profit rose by less than 1 percent as UK and U.S. defense spending constraints hit client confidence and delayed demand. Reporting immediately after “sequestration” — the start of a second wave of budget cuts — hit the U.S. economy last week, Ultra said underlying pretax profit rose to 115.6 million pounds (US$173.5 million) from 114.9 million pounds.
Analysts’ on average expected pretax profit to fall to 112.91 million pounds, according to Thomson Reuters I/B/E/S. The maker of gunshot detection equipment and sonars for submarines said revenue grew 4 percent to 760.8 million pounds, helped by the company’s transport, energy, and security and cyber divisions.
The company’s core tactical and sonar systems division, which contributes 56 percent to overall revenue, was hurt as defense contract officers in the UK and United States delayed the start of new programs, reducing order flow. Ultra warned of a flat full-year profit in November, as UK and U.S. budget constraints and the threat of a second round of defense cuts in the United States delayed demand in Ultra’s two biggest markets.