Ricardo PLC on Monday announced plans to sell its defence business as part of a strategic revamp unveiled in May 2022.

Ricardo Chief Executive Officer, Graham Ritchie, said the proposed sale will enhance Ricardo’s focus on growing as a leader in environmental and energy transition markets, whilst allowing for defence to realise its full potential.

In addition, the firm said it is exploring potential acquisitions but that the proceeds would be used in line with its capital allocation policy.

‘Any potential acquisition would be expected to be earnings accretive and in line with Ricardo’s strategy to increase its presence in the environmental consulting market, thereby accelerating our portfolio transition to a high-growth, high-margin, lower-capital intensive business,’ the company added.

In the short-term, the defence sale is expected to be dilutive to earnings per share.

Shares in Ricardo rose 2.3% to 428.69 pence each in London on Monday.

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