Ultra taking aim for robot wars

DEFENCE specialist Ultra Electronics is hoping to cash in on the boom in hi-tech warfare signalled by the US military's push last month to send 'robot troops' to Iraq.

Ultra already supplies parts for unmanned vehicles, and chief executive Dr Julian Blogh said it was clear the area was going to evolve in coming years.

He added: 'We would expect to gain from that evolution.'

Ultra's best sellers are surveillance-IT for the battlefield as well as sonobuoys to detect submarines, and the group is experiencing a surge in demand as geo-political tension rises.

Underlying pre-tax profits in the 12 months to 31 December rose almost 16% to £39.7m on the back of revenues of £319.7m, up more than 12%. Orders are at record highs.

Blogh said the weak dollar would be likely to knock £2m off profits this year.

Broker Merrill Lynch reiterated its 'neutral' rating on Ultra shares, arguing that the good numbers have already been priced in. It added that the stock is trading at a significant premium to its peers, and the upside is therefore limited.

Mean while, Cazenove said Ultra's full year pre-tax profit and earnings per share figures were slightly better than its estimates. The broker has raised its 2005 earnings per share estimate to 48.3p from 47.1p.