Ultra issues second profit warning after soaring costs at US acquisition Herley

Defence contractor Ultra Electronics issued a second profit warning on Wednesday because of cost overruns at the electronic warfare unit Herley, which it recently bought.

The company, which appointed Simon Pryce as chief executive in March, said that profits for the six months to June 30 will now be between £4 million and £6 million less than the £113 million operating profit forecast.

US-based Herley, which Ultra bought in 2015 for $265 million (£200 million) from defence giant Kratos, makes missile detection gear for use on the Eurofighter, the F-16 (pictured) and Boeing’s Growler fighter jet. It last warned on profits in November, precipitating the departure of Rakesh Sharma as boss.

Shares fell 5% to 1510p.

The order book was more bullish and the company maintained its outlook for organic growth for the first time in seven years.

Pryce, who took up the reins last week, said: “Though individual programme problems clearly detract from an otherwise broadly satisfactory first half, the team are focused on tackling operational and customer issues while continuing to win new business.”