Trading Update

Ricardo PLC
05 January 2004

                                                                  5 January 2004

                                  Ricardo plc

                                 Trading Update


Ricardo plc, one of the world's leading independent automotive consultancies, is
today issuing an update on trading.  Ricardo plans to announce interim results
for the six months ending 31 December 2003 on Monday February 23, 2004.


Market conditions in the first half were extremely challenging.  As we outlined
at the time of the AGM in November, we expected our first half result to be
depressed, but we are now anticipating that results for the first half, before
redundancy costs, goodwill and tax, will be broadly breakeven.


AowHhhoHHs we approached the end of the first half, we were encouraged to see a
significant improvement in bidding opportunities and an increase in customer
interest and activity levels across the business.  As a result, we are pleased
to report that  December has been the best month for order intake since June
2003 and we are encouraged that potential order enquiries, which have remained
flat from December 2002 to November 2003 rose by £40m in December 2003.


In the face of challenging market conditions, Ricardo has maintained a clear
focus on cost reduction and improved productivity.  Actions have been taken to
reduce headcount by around 250 through a combination of redundancies and the
release of contract workers - 150 had left by 31 December 2003 and a further
significant reduction is planned for very early in 2004. This will result in
annualised cost savings in the order of £10 million, the benefits of which will
start to come through in the second half of this year, and realigns the business
more closely with that of the current market and our customer needs.  In
addition, recently announced changes to the management structure will mean that
Ricardo is better placed to exploit synergies across the business.  As a result
of the above actions, we anticipate taking an exceptional charge of
approximately £3.3m in the first half relating to these restructuring costs.


Ricardo has a clear strategy of delivering engineering solutions to the world's
automotive and related industries through high quality technical and strategic
consulting services. Acquisitions in the past year have broadened Ricardo's
offering into new geographic markets and new areas of technical expertise. We
now have a strong presence in the USA, Germany and a developing business in
Japan, the world centres for automotive business. We have also developed
technologies that encompass most of the challenging areas of vehicle, engine and
transmission and strengthened our position in controls and electronics. New
vehicle releases introduced in the last six months include two examples where
our ability to deliver on time and on budget to significantly reduced timescales
has underlined our value to our customers. The ever present need for OEM's to
develop new engine platforms and vehicle variants remains. Vehicle warranty and
safety issues and ever tightening emissions legislation also continue to provide
opportunities for Ricardo.


In terms of new business development, Ricardo was recently awarded a contract
with a market leader in the global gasoline hand held power tools market, in
relation to a Ricardo patented technology that will allow the customer to meet
future emissions legislation as it comes into force in this marketplace in the
near future.


With some initial signs that our automotive market may be on the turn, we are
confident that Ricardo is well positioned to return to growth as the market
recovers.


For further information:


Enquiries:


Ricardo plc                                             Today: 0207 554 1400
Rodney Westhead                                         Thereafter: 01273 455611
Andrew Goodburn

Gavin Anderson & Company                                020 7554 1400
Laura Hickman/Charlotte Stone

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            The company news service from the London Stock Exchange