Engineering consultant Ricardo had a torrid time in the UK last year. Project cancellations and a shortage of new orders added up to a miserable end to 2003 for the highly-rated automotive technology specialist, pushing its domestic business into the red.
The company said the ‘unusually severe’ trading climate had led to 225 UK job losses, and the associated redundancy costs weighed heavily on its performance. There was, however, better news from the company’s fledgling businesses in Germany and the US, which remained profitable despite operating in tough markets of their own. This helped the group as a whole scrape to an operating profit of £92,000 for the last six months of the year, compared to almost £7m in the equivalent period of 2002.
Despite the disappointing results, Ricardo reiterated its confidence in its strategy of developing technologies in areas that are likely to become increasingly significant to the global automotive industry. These include emissions reduction, fuel economy and safety.
Ricardo is especially keen to develop its vehicle controls and electronics interests, believing that the importance of these areas is set to soar.
Another focus for Ricardo is on ‘whole vehicle life’ – in other words, playing a role in maintaining vehicles after they leave the factory.
‘The vast majority of our work ceases at the point where a vehicle goes into production,’ the company told its shareholders. It outlined plans to develop more expertise in post-production areas such as routine service, crash repair and data analysis throughout a vehicle’s lifespan, and said that more than half of the profits arising from the sale of a new car are accrued beyond the point of sale.
Outside the automotive sector, Ricardo has patented a carburettor for hand-held, two-stroke, petrol-powered tools, encompassing the vast global market for chainsaws, strimmers and hedge-cutters. The company said its technology will allow manufacturers of such tools to meet future legislation governing emissions. Research in this field could also be used in projects for the two-stroke-powered motor scooter market, the company said.
There was one further bright spot for Ricardo – it supplied the transmission to the winning car in the gruelling Paris-Dakar rally for the second consecutive year.