One to watch

Ricardo, a UK-based consultancy, is active in the UK, North America and Germany. Its customer base includes car manufacturers, vehicle component and system manufacturers, government agencies and industry regulatory bodies.

In a recent trading update it confirmed its order book, until the end of June, was 15 per cent higher than last year's, at 101 million. This was reassuring because Ricardo has had past problems.

The turmoil within the US automotive industry hit it hard and profits fell very sharply in the first half of last year before staging a recovery. This was in response to the re-jigging of its business, reducing its dependence upon traditional Western car manufacturers and broadening its range to embrace the UK and US defence sectors.

Predictably, Ricardo is actively involved in looking at ways of reducing fuel consumption and developing electric vehicles. Its results will be announced this month and hopefully will address the view it is still dependent upon the US car industry. Meantime, there is a useful yield of well over 4 per cent.

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