REG - Ricardo PLC - Strategy Update

RicardoAnnouncement

21/10/2024 07:00

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RNS Number : 9231I  Ricardo PLC  21 October 2024

 

21 October 2024

 

Ricardo plc ("Ricardo or the "Group")

Strategy update

In May 2022, the Board announced a 5-year strategy to transition the business
to become a world-leading strategic and engineering consultancy in
environmental and energy transition. The Group's portfolio is to focus on
strategic, technical, and engineering solutions at the intersection of
transport, energy and global climate agendas.

 

Consistent with the Group's strategy, Ricardo announces its intention to
divest its Defense business.

 

The Defense business currently sits within the Group's 'Established Mobility'
portfolio and provides capabilities in engineering and production services for
land vehicles in the defence sector. Its solutions-products have been the
principal contributor to the Defense business' recent strong financial
performance, due to an extension contract award in September 2023 for $385m,
extending the previous Antilock Brake System ("ABS") base three-year contract
to March 2026, with deliveries through to September 2027. To support its
future success, the Defense business is also active on several new pilot
programmes for the US Army, for which it has received initial funding awards.

 

Reflecting its current strong financial performance, the potential divestment
is expected to be dilutive to the Group's earnings per share in the near term.
Depending on the level of proceeds received from the potential divestment, the
board will consider the appropriate use of proceeds in line with the Group's
capital allocation policy. As part of this, Ricardo has been actively
exploring potential acquisition opportunities to reinvest some or all of the
proceeds in the event of a completed divestment. Any potential acquisition
would be expected to be earnings accretive and in line with Ricardo's strategy
to increase its presence in the environmental consulting market, thereby
accelerating our portfolio transition to a high-growth, high-margin,
lower-capital intensive business.

 

There can be no certainty that any divestment or acquisition will proceed.

 

Ricardo Chief Executive Officer, Graham Ritchie, said, "The proposed sale of
the Group's Defense business will enhance Ricardo's focus on growing as a
leader in environmental and energy transition markets, whilst allowing for
Defense to realise its full potential through new programme development,
following the successful award of the ABS programme."

 

-ENDS-

About Ricardo plc

Ricardo plc is a global strategic, environmental, and engineering consulting
company, listed on the London Stock Exchange. With over 100 years of
engineering excellence and close to 3,000 employees in more than 20 countries,
we provide exceptional levels of expertise in delivering innovative
cross-sector sustainable outcomes to support energy transition and scarce
resources, environmental services, together with safe and smart transport
solutions. Our global team of consultants, environmental specialists,
engineers, and scientists support our customers to solve the most complex and
dynamic challenges to help achieve a safe and sustainable world. Visit
www.Ricardo.com.

 Investor and media relations
 Ricardo plc  Judith Cottrell   Tel 01273 455 611

              Natasha Perfect   investors@Ricardo.com (mailto:investors@ricardo.com)
 SEC Newgate  Elisabeth Cowell  Tel 020 757 6882

              Ian Silvera       Ricardo@segnewgate.co.uk (mailto:Ricardo@segnewgate.co.uk)

 

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