LONDON (ShareCast) - (Sharecast News) - Ricardo has delivered annual results broadly in line with market forecasts, with solid growth in underlying profits, with the engineering, environmental and strategic consultancy services company expressing confidence heading into the new financial year.
However, shares were in the red on Wednesday, with analysts highlighting the impact of a slight decline in order intake on the near-term outlook.

Underlying pre-tax profit totalled £38.8m in the year to 30 June, up 14.1% on the previous year as the operating profit margin improved to 8.2% from 7.6% and revenues rose 7% to £474.7m.

Ricardo said the bottom-line growth was helped by improved operational efficiencies as it accelerated its operating model transformation, "which saw us centralise enabling functions and increase our use of flexible resources".

Nevertheless, order intake was down 5% at £496.1m, which the company blamed on tough comparatives with a record performance the year before, as well as "continued variability of order timing and order volatility in some end markets".

Shore Capital analyst Jamie Murray said "there is work to do" if current revenue forecasts for the new financial year are to be met, with the order book only stable and order intake falling 5%.

"The outlook is slightly negative with order intake falling and the backlog remaining stable, which could cause downward pressure on FY25F expectations," Murray said.

"The near term remains uncertain with automotive companies, a key segment for Ricardo, like Volkswagen and Mercedes reporting that volume sales have fallen, as consumer spending power is squeezed."

The stock was down 1.5% at 510p by 1154 BST.

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