British automotive consultancy Ricardo Plc is searching for bolt-on acquisitions alongside US margin growth to help get the business back on track, Chief Executive Dave Shemmans said on Monday. "We are looking out for appropriate acquisitions ... the kind that have brought us success in the past have been bolt-on, not very large ones," he told Reuters in a telephone interview.
He added that the firm would also look to expand into new territories, such as India and Russia. The expansion will form part of the company's growth strategy alongside the immediate task of improving margins in the US division, which underperformed the company's own expectations in the year to end June.
The group said overall pretax profit came in at 12.2 million pounds ($24.6 million) in the period, down from 14.5 million last year - although the 2006 figure was inflated by a pensions credit.
The order book was up 28 percent at 92 million pounds, but shares in the company were down nearly 6 percent at 303.5 pence by 1234 GMT, valuing it at 154 million pounds. Shemmans said the firm is pinning its US hopes on the new president of the division, Dean Harlow, who has been in the post for around three months.
"We have been disappointed with US margins for some time. Dean Harlow will make it more customer focused ... we should see the benefits in the second half," Shemmans said.
He added that US margins were around 3 percent, compared with group targets of 10 percent already achieved in the UK, but that the market was strong - partly due to demand for hybrid cars and calls to reduce carbon emissions. He said selling the US business was not an option. "The US is core to our strategy. We are a global company," he said. Ricardo increased its full year dividend by 6.4 percent to 10 pence a share.