LONDON (ShareCast) - (Sharecast News) - Ricardo said in an update on Tuesday that it expects to deliver financial performance for the 2024-2025 financial year within the range of analyst expectations, supported by a high level of secured and pipeline net revenue across all business units.
The London-listed engineering and environmental services company said that recent market uncertainty had caused short-term volatility in orders and foreign exchange, but that additional cost-saving actions in the second half were expected to largely mitigate the impact.

It said cash conversion in the second half was anticipated to materially exceed the company's medium-term target.

When viewed over the two-year period ending 30 June, Ricardo said it expected cash conversion for continuing operations to be above 85%.

Net debt for the year was projected to be towards the lower end of analyst guidance, before restructuring costs, with the company expected to remain within its financial covenants.

Management said it planned to deliver at least £10m of incremental cost savings in the 2025-2026 period, building on the efficiencies and margin improvements achieved in the current year.

Ricardo also highlighted enhanced collaboration between its automotive and industrial, and performance products units, which was contributing to diversification into broader industrial markets.

The company said it was continuing to make strong progress on its portfolio transformation, with a growing focus on environmental and energy transition solutions.

Its board said it remained confident in its ability to deliver significant shareholder value through a simpler and more efficient operating model.

"Despite the increased global and market uncertainty in the last few months, Ricardo expects to deliver trading within the range of analyst estimates for 2024-2025," said chief executive officer Graham Ritchie.

"This reflects the continued focus on prioritising growth in resilient end markets, delivering an efficient cost base and focused cash management."

Ritchie said Ricardo was continuing to transform its portfolio leading to a simpler, more efficient business with higher growth and higher margins which would create "significant" value for all shareholders.

"We have a clear strategy, underpinned by targeted cost savings in the short term, and a focus on resilient services and markets for value creation in the medium term."

At 0807 BST, shares in Ricardo were down 1.3% at 224.05p.

Reporting by Josh White for Sharecast.com.

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