Science Group plc invests £12.2m in Ricardo plc shares

Science Group is an international science & technology consultancy and systems organisation. Ricardo is a global strategic, environmental and engineering consultancy at the intersection of transport, energy and global climate agendas.

Science Group now owns around 5.26 million shares in Ricardo, equivalent to 8.46 per cent of the voting rights. It describes the deal as a strategic investment.

The Ricardo shares were acquired through open market purchases between February 16 and 27 and represent an average cost of around 231p per share. Science Group says it may or may not increase its shareholding in Ricardo.

Management say they will engage with the Ricardo Board and its major shareholders in relation to managing this investment. It notes that prior to the new deal, the Ricardo share price was flirting with 15-year lows.

By comparison, the FTSE Small Cap index has increased by over 130 per cent over the same timespan and Science Group shareholders have benefited from a more than 15-fold shareholder return from its consultancy and systems strategy since March 2010.

Science Group says its strong balance sheet and operating cash flow have enabled the Ricardo share purchases to be funded from existing resources. At December 31, Science Group had gross cash of £38.6m and net funds of £26.8m.

Its revolving credit facility remains undrawn and the share buy-back programme, which is unaffected by the strategic investment, continues to operate under the delegated authority previously defined.

The Group provides products and services to clients in the key vertical markets of defence, industrial, medical and consumer. With offices throughout Europe and North America, two dedicated R & D innovation centres and employees fluent in over 30 languages, Science Group supports a global client base in more than 100 countries. Its HQ building is at Harston Mill, on the outskirts of Cambridge.