StockMarketWire.com - Ultra Electronics, which provides technology to the defence sector, posted a fall in annual profit following a number of contract delays.

The company also announced that it had terminated its $234m acquisition of US sonobuoy specialist Sparton after the US Department of Justice rejected the deal on anti-trust concerns.

Pre-tax profit fell 10.4% to £60.6m, as revenue decreased by 1.3% to £775.4m. The weaker results were in line with the downgraded guidance delivered in November.

The company declared a final dividend of 35p per share, up 4.2% on the previous year.

Ultra Electronics said it had started the year with a 'strong' order intake, with 2018 opening order cover of 62%, compared to 56% at the same time last year.

'2017 was a challenging year in the group's core defence markets and, as previously reported, Ultra experienced delays to a number of programmes and contracts relatively late in the year,' executive chairman Douglas Caster said.

'The group continued its focus on managing costs and efficiencies within the businesses, which enabled sound operating margins to be achieved.'

The group's operating margin contracted to 15.5%, from 16.7% in 2016.

'Ultra entered 2018 with good visibility,' Caster said.

The company had an opening order book of at least £914m, excluding over £1.5bn of expected mid-term orders from long-term positions, he added.

'As previously disclosed, the board's expectations remain for the group to make modest progress in underlying revenue and operating profit at constant currencies in 2018 after investing for the future through increased R&D and capital expenditure.'

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