Ricardo (RCDO)

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186
Ricardo RCDO Logo

A global engineering and strategic, technical and environmental consultancy business with a value chain that includes the niche manufacture and assembly of high-performance products.

8-Nov-2017 – 837.5p – £443.2m – PER 13.8

Trading Update – LFL Order intake up £33m to £106m. The CEO is pleased with the start to the year and looks forward to continued progress.

Wondering why this recent update is not more upbeat. On a PER of 13.8, if this increase in order book translates to profit, this looks decent value here. Good ROCE, Operating Margin and a decent well covered 2.5% or so Dividend. The fly in the ointment could be the £37m Net Debt and £18m (I believe) pension deficit – Although at less than 15% of Mkt Cap, that doesn’t seem over the top.

17-Jan-2018 – 945p – £504.7m – PER 15.5

Trading Update For The 6 Months To End December 2017 – Quite a lot of waffle but the metric seems to be the Order book is strong (up over 25%) and Net Debt is down to £32m (from £38m).

If this order book translates into real Profit, there still seems to be decent value here (but there’s zero mention of Profit in this update). The ROCE, Operating Margin and a decent well covered 2.5% or so Dividend helps but I will wait until I see some actuals.

18-Sep-2018 – 832p – £442.2m – PER 14.1

Interim Results For The 6 Months To End June 2018 – Record order intake at £413m, up£47m on FY 2016/17, Record year-end order book at £288m, up £40m on June 2017, Revenue up 8% to £380.0m, Underlying PBT up 2% to £39.0m on FY 2016/17, Net Debt£26.1m (from £37.9m at June 2017 (after £6m acquisition of Control Point). Outlook ispositive with a good pipeline – Dividend increased by 6% to 20.46p from 19.30p.

The Order book growth always seems better than Revenue, PBT, EPS and Dividend growth– I remain Neutral.

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