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Ultra Electronics sells Airport Systems business for £22mln

Published: 19:20 02 Nov 2018 AEDT

airplane
The disposal will be marginally dilutes Ultra’s earnings for the year ending December 2019

Ultra Electronics PLC (LON:ULE) said Friday it will sell its Airport Systems business for total consideration of £22mln, disposing of a unit the defence technology contractor said had little in common with the whole of the group.

The FTSE 250 firm said the business is being sold to ADB Safegate, an airfield lighting group based in Columbus, Ohio. Ultra said £2mln of the £22mln sale price is deferred, and the deferred payment will be made following the transfer of certain commercial contracts.

READ: Ultra Electronics downgraded to ‘hold’ by Kepler Cheuvreux on limited upside of raised target price

Airport Systems provides specialised IT software to improve operational performance at airports and airlines. The software products are installed at 150 airports and are in-service with 100 airlines internationally, said Ultra. 

Simon Pryce, Ultra’s chief executive, said: "Although Airport Systems has been a part of Ultra for some time, it has little customer, process or technology commonality with the rest of the Group.”

The disposal “is the best long-term solution for Airport Systems customers, employees and other stakeholders and represents good value for Ultra,” said Pryce.

The sale will be marginally dilutive to Ultra’s earnings for the year ending 31 December 2019. The gross assets of Airport Systems were £7.2mln as 31 December 2017. Ultra said depending on when the transaction is completed, it will result in either a goodwill write down or accounting loss on disposal of about £8mln.

The transaction is expected to be completed by 31 January 2019.

Airport Systems in the year ended 31 December 2017 posted revenues of £18.9mln and operating profit of £3.2mln after allocation of central overheads.

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