Poised for the Trump effect

Ultra’s trading statement covering the period to 27 April 2017 was released ahead of today’s AGM. It indicates that trading is in line with management expectations. The US budgetary process is in full swing, with the Continuing Resolution (CR) due to expire shortly, which has been a constraint on US defence spending during the period. The already indicated bias of trading towards H217 is still expected to deliver unchanged prospects for modest growth for the year as a whole. Ultra’s shares have continued to perform well year to date (+8.2%), closing in on our fair value of 2,257p. The positive re-rating appears justified by the improving defence outlook globally.