Defence company Ultra Electronics’ chief executive has been dramatically ousted in a surprise after-hours move, it has been revealed.
The FTSE 250 company said Rakesh Sharma, who has led the company since 2010, was leaving with immediate effect on Friday night.
His departure comes after “a period of reflection by the non-executive directors on the future leadership of Ultra”, the company said.
Mr Sharma, a 28-year veteran with the company, will be replaced by chairman Douglas Caster, who led the company from 2005 to 2010, until a new chief executive can be found.
His departure comes after Ultra, which is a specialist in naval warfare equipment such as submarine detecting sonar buoys, issued a profit warning. The company said it now expects underlying operating profit of £120m compared with market forecasts of £147m and that organic revenue would decline by about 4pc.
Warning about the trading conditions, Ultra – which derives most of its revenue in the US – said that “while the majority of markets have been satisfactory, the UK market has been difficult and has become increasingly so in the second half".
“There are mounting pressures in the funding of UK defence programmes and this has resulted in the UK MoD pausing, cancelling or delaying numerous programmes. Within the last few weeks a number of our UK orders budgeted for 2017 have been affected.”
The company also said it expected its $234m (£178m) acquisition of a US rival to be delayed. It is understood that this is due to US Department of Justice officials being swamped with work and is unrelated to Mr Sharma’s leadership.
The news saw Ultra’s shares fall more than 11pc to £15.27 today.
Mr Caster said: “Throughout his service to Ultra, Rakesh has contributed significantly to the group’s development into an international provider of specialist capabilities with positions on a broad number of platforms and programmes. On behalf of the board, I wish Rakesh well.”
The executive chairman added: “While market conditions have been more challenging in the last few years, the group has strong market positions, differentiated technologies and talented people. While the UK defence market is difficult, defence spending in the US is increasing. We are focused on identifying the right leader to deliver shareholder value through a renewed focus on organic performance in the next stage of the group’s development.”
Mr Sharma said: “It has been a privilege to be chief executive of Ultra and I wish the Group and all its staff well for the future.”