Interim Results

Ricardo PLC
25 February 2002

                                                                25 February 2002



                                  Ricardo plc

Interim Results for the six months ended December 2001



Ricardo is a leading independent automotive engineering consultancy and a
world-leading technology provider of research and design services for the
automotive and motorsport industries. Ricardo employs 1,450 people and has
technical centres in the UK, USA, Germany and the Czech Republic. Ricardo is a
constituent of the FTSE techMark100 index.




                                   HIGHLIGHTS



•         Profit before tax up 12% to £7.6m (2000: £6.8m)



•         Order book up 15% to over £57m



•         Earnings per share up 13% to 11.1p (2000: 9.8p)



•         Interim dividend 2.6p (2000: 2.5p)



•         Trend to outsourcing by OEMs and emissions legislation continue to
          support growth



•         Exciting opportunities in newly created Motorsport division





Commenting on the results, Rodney Westhead, Chief Executive said:



'I am pleased to report a good performance in the first half. The new calendar
year has started with a record opening January order book and a record January
order intake across all of the business. Despite some pressure on margins, we
expect performance for the full year 2002 to be on track. Looking forward, there
is greater uncertainty given the current difficult market conditions in the
automotive industry but the group is well placed to exploit long term trends in
our key markets.'



Further enquiries:


Ricardo plc                                                (today) 020 7457 2345
Rodney Westhead, Chief Executive                       (thereafter) 01273 455611
Andrew Goodburn, Finance Director

Gavin Anderson & Company
Laura Hickman/Charlotte Stone                                      020 7457 2345

Website: www.ricardo.com



Interim Results for the six months to 31 December 2001

Chairman's Statement



Overview



The trading results for the six months to 31 December 2001 show an overall
increase in pre tax profits of 12% to £7.6m.  This result was achieved on an
increase in turnover of £2.8m for the continuing operations coupled with a
reduction in the value of material content in customer contracts.  The net
margin has improved from 10.1% to 11.0%.  The increased profit together with a
reduced tax rate of 28.5% (2000  30%) has resulted in earnings per share growth
of 13% to 11.1p.  The order book has continued to improve across the Group with
an overall increase of 15% to over £57m compared to £50m 12 months ago, after
eliminating the effect of the sale of RTA ('Ricardo Test Automation').  Our
balance sheet remains in a strong position providing us with capacity to be
acquisitive at the right price.



This good first half result has been achieved against continuing uncertainty  in
the global automotive industry and we believe reflects Ricardo's strength in its
marketplace and the benefits of Ricardo's strategy of focusing its strengths in
automotive consulting. A number of factors continue to support the growth of our
business.  In a competitive market place, the OEMs continue to need to get new
models to market faster.  Emissions legislation plays an important part in our
business, as OEMs focus on producing fuel-efficient vehicles.



Dividend



An interim dividend of 2.6p (2000 - 2.5p) will be paid on 26 April 2002 to all
shareholders on the register at the close of business on 2 April 2002.



Operations



In the UK the development of our Engine, Transmission and Vehicle businesses
continues at Shoreham and Leamington.  Significant price pressure is currently
being applied by major customers, however developments in electronics and other
high value added areas, particularly those backed by our own R&D, continue to
grow.  The perpetual change in the shape of our business has resulted in some
redundancies but recruitment continues in high added value areas.



Our core engine business, RCE, is involved in a wide spread of contracts across
the automotive industry.  The growing importance of electronics is a rapidly
developing area of expertise for Ricardo and one in which we see further
significant growth in the future.  However, there is currently an over-capacity
in Europe for engine testing, where the pressure on rates is most keenly felt.



Ricardo DTS, our transmissions business, has reported record profits despite
separating out our vehicle engineering activities from this operation. Our order
book is strong for 2002 and we are working on a number of valuable projects. Our
motorsport activity is developing, where Ricardo has a growing presence in this
£4billion industry.



Our newly created vehicle engineering division was profitable from day one. The
clear new focus on vehicle engineering is delivering good results. The order
book is growing steadily although we have seen some clients holding back on new
projects. Despite this we believe that overall prospects for year ending June
2002 are good.



In the USA, Ricardo Inc has traded satisfactorily despite the continuing
downturn in the US economy.   In order to house the growing number of staff and
bring a number of operations under one roof, the decision was taken in the
autumn of 2001 to bring all Ricardo Inc staff together at the central office in
Belleville.  This has involved an extension  of the existing office and workshop
complex, to improve operational efficiency and be able to provide secure
facilities for co-located Ricardo/customer project teams.  This accommodation,
which will be leased, occupies some 77,000 square feet and is directly joined to
the existing premises.  The new building will be completed in the late autumn of
2002  positioning Ricardo for the anticipated upturn in activity in the US
automotive market.



In Germany, we have opened an office in Munich and we seek opportunities to
develop our local presence, which remains important as we continue to build and
strengthen our relationships with our German customer base.



The Future and Prospects



The new calendar year has started with a record opening January order book and a
record January order intake across all of the business. Despite some pressure on
margins, we expect performance for the full year 2002 to be on track. Looking
forward, there is greater uncertainty given the current difficult market
conditions in the automotive industry but the group is well placed to exploit
long term trends in our key markets.






CONSOLIDATED PROFIT AND LOSS ACCOUNT
Interim Statement for the six months ended 31 December 2001


                                                             Six Months        Six Months           Year
                                                                  ended             ended          ended
                                                            31 December       31 December        30 June
                                                                   2001              2000           2001
                                                                  £'000             £'000          £'000


Turnover
Continuing operations                                            69,131            66,318        138,370
Discontinued operations                                               -             1,303          1,541
                                                                 69,131            67,621        139,911
Operating profit
Continuing operations                                             7,619             7,109         15,681
Discontinued operations                                                 -              34             10
Profit on ordinary activities before interest                     7,619             7,143         15,691
Net interest                                                       (18)             (344)          (584)
Profit on ordinary activities before taxation                     7,601             6,799         15,107
Taxation                                                        (2,167)           (2,040)        (4,277)
Profit on ordinary activities after taxation                      5,434             4,759         10,830
Equity minority interest                                           (46)              (83)          (187)
Profit for the financial year                                     5,388             4,676         10,643

Non - equity preference dividends                                     -               (2)            (2)
Profit attributable to ordinary shareholders                      5,388             4,674         10,641
Equity ordinary dividends                                       (1,278)           (1,202)        (3,753)
Amount transferred to reserves                                    4,110             3,472          6,888


Dividend per ordinary share                                        2.6p              2.5p           7.8p


Basic earnings per ordinary share                                 11.1p              9.8p          22.2p


Diluted earnings per ordinary share                               10.9p              9.5p          21.6p


Notes:

1.This Interim Statement should be read in conjunction with the Report and 
  Accounts for the year ended 30 June 2001.

The accounts for the six months ended 31 December 2001 and 31 December 2000
respectively are neither audited nor reviewed. The abridged accounts for the
year ended 30 June 2001 do not constitute statutory accounts within the meaning
of section 240 of the Companies Act 1985 and are an extract from the latest
published accounts which have been delivered to the Registrar of Companies and
on which the auditors gave an unqualified audit  report.



2.Taxation

The tax charge for the period has been calculated as 28.5% (2000 - 30%).



3.Earnings per share

The calculations of basic earnings per ordinary share and diluted earnings per 
ordinary share have been made in accordance with FRS14.


The basic earnings per ordinary share has been calculated by dividing the profit
attributable to ordinary shareholders of £5,388,000 (2000 - £4,674,000) by the
weighted average number of shares in issue of 48,461,816 (2000 - 47,565,252).
The calculation of the average number of shares in issue has been made having
deducted the shares held by the Employee Share Ownership Trust and the Long Term
Incentive Plan Trustee.


The diluted earnings per ordinary share has been calculated by dividing the
profit attributable to ordinary shareholders of £5,388,000 (2000 - £4,674,000)
by the adjusted weighted average number of shares in issue. This latter figure
has been calculated by adjusting the shares in issue of 48,461,816, as described
above, to take account of the effect of the diluted securities of share options
and the Long Term Incentive Plan, to give an adjusted total of 49,424,391 shares
in issue (2000 - 48,969,477).


SUMMARISED BALANCE SHEET

Interim Statement for the six months ended 31 December 2001



                                                                As at           As at             As at
                                                          31 December     31 December           30 June
                                                                 2001            2000              2001
                                                                £'000           £'000             £'000

Fixed assets                                                   48,663          47,251            50,291

Stock and debtors                                              43,008          39,143            44,497
Creditors falling due within one year                        (42,370)        (34,466)          (41,629)
                                                                  638           4,677             2,868
Cash deposit                                                      340             340               340
Net bank balance                                               17,478           2,798             9,930
Net current assets                                             18,456           7,815            13,138
Total assets less current liabilities                          67,119          55,066            63,429
Creditors falling due after more than one year
Bank borrowings                                               (8,120)         (8,643)           (8,641)
Provisions for liabilities and charges                        (6,104)         (4,534)           (6,302)
Net assets                                                     52,895          41,889            48,486
Called up share capital and share premium
account                                                        21,500          18,391            20,518
Capital redemption reserve                                         40              40                40
Long term incentive plan reserve                                  891             741               610
Reserves                                                       30,137          22,391            26,963
Ricardo shareholders' funds
(including non - equity interests)                             52,568          41,563            48,131
Equity minority interest                                          327             326               355
Total shareholders' funds                                      52,895          41,889            48,486

These accounts were approved by the Board of Directors on 25 February 2002

This announcement is being circulated to all shareholders of the Company, and
copies will be available to the public at the Company's Registered Office at
Bridge Works, Shoreham - by - Sea, West Sussex, BN43 5FG


CONSOLIDATED CASH FLOW STATEMENT
Interim Statement for the six months ended 31 December 2001

                                                        Six months           Six months                  Year
                                                             ended                ended                 ended
                                                       31 December          31 December               30 June
                                                              2001                 2000                  2001
                                                   £'000     £'000      £'000     £'000      £'000      £'000

Net cash inflow from operating activities                   14,096                8,956                22,342


Net interest paid                                   (17)                (372)                (645)
Dividends paid on non-equity shares                    -                  (2)                  (2)
Dividend paid to minority shareholder               (63)                    -                 (93)

Net cash outflow from returns on
investment and servicing of finance                           (80)                (374)                 (740)

Taxation                                                   (1,169)              (1,422)               (4,202)

Capital expenditure and financial
investment
Unlisted trade investment                              -                    -                (232)
Sale of own shares                                    49                    -                    -
Purchase of tangible fixed assets                (3,486)              (6,687)             (13,032)
Sale of tangible fixed assets                        119                  380                  761

Net cash outflow from capital expenditure                  (3,318)              (6,307)              (12,503)
and financial investment

Acquisitions and disposals
Sale of subsidiary undertaking                         -                    -                3,255
Cost of disposal                                       -                    -                (260)

Net cash inflow from acquisitions                                -                    -                 2,995
and disposals
Equity dividends paid                                      (2,565)              (2,385)               (3,587)


Cash flow before use of financing                            6,964              (1,532)                 4,305

Financing
Issue of ordinary share capital                      982                   94                1,752
Redemption of preference shares                        -                 (72)                 (72)
Capital elements of finance lease rental
payments                                             (1)                 (48)                 (52)
Loans repaid                                       (420)                 (35)                (306)

Net cash inflow/(outflow) from financing                       561                 (61)                 1,322

Increase/(decrease) in cash                                  7,525              (1,593)                 5,627


NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT



                                                             Six months       Six months             Year
                                                                  ended            ended            ended
                                                            31 December      31 December          30 June
                                                                   2001             2000             2001
                                                                  £'000            £'000            £'000

Reconciliation of net cash flow to movement in net
funds/(debt)



Increase/(decrease) in cash                                        7,525         (1,593)            5,627
Movement in debt and lease financing                                 421            (35)              358

Change in net funds/(debt ) from cash flows                        7,946         (1,628)            5,985
Translation difference                                               124             190            (285)


Movement in net funds/(debt) in period                             8,070         (1,438)            5,700

Net funds/(debt) at beginning of period                            1,288         (4,412)          (4,412)
Net funds/(debt) at end of period                                  9,358         (5,850)            1,288



Reconciliation of operating profit to net cash
inflow from operating activities


Operating profit                                                   7,619           7,143           15,691
Depreciation charges                                               4,583           4,017            8,068
Goodwill amortisation                                                  6               -               11
Profit on sale of tangible fixed assets and
investment properties                                                (6)            (99)            (108)
                                                                     

Long term incentive plan charge                                      281             274              611
Quest contributions - written off to reserves                      (662)            (66)          (1,302)
Decrease/(increase) in working capital                             2,275         (2,313)            (629)

                                                                  14,096           8,956           22,342





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