Ultra Electronics, the battlespace IT company, is in talks with British Energy to provide control systems for nuclear power stations.

The company’s reactor control systems are being fitted to the Royal Navy’s Vanguard Trident nuclear submarines and will also go into the next generation of Astute subs. Douglas Caster, Ultra’s chief executive, said yesterday that he was in talks with British Energy, which owns eight nuclear power stations in the UK, to provide similar technology for the civil market.

He said: “We have had a couple of contracts out of British Energy worth a few million pounds for sensor systems but the real opportunity is in building dialogue for the future.”

British Energy is expected to spearhead the development of a new generation of nuclear power stations, which will be built over the next decade.

Ultra hopes to be able to provide the reactor control systems in these new facilities as well as offering upgrades to British Energy’s existing, aging power stations.

A number of British defence companies are hoping to enter the civilian nuclear market when the government gives the go ahead for the construction of a new generation of reactors.

Rolls Royce, which builds reactors for nuclear submarines, and BAE Systems, which builds the submarines, also want to enter the civil market.

Mr Caster’s comments came as Ultra reported a 20 per cent increase in revenues during the first six months of this year to £231.9 million.

The FTSE 250 company also increased profit before tax by 16 per cent to £30.4 million and raised its interim dividend by 19 per cent to 8p a share.

Ultra, which also makes sonar systems, said its order book was worth £645 million.

Mr Caster said that military demand for IT systems in the battlefield was propelling the company’s earnings. Ultra has been particularly successful in selling high-bandwidth radios to the United States Army, which allow the transfer of more information to patrols.

Analysts at Numis said that Ultra was likely to continue its strong growth trend, particularly through acquisition.

In a note Numis said: “With debt of only £53 million, Ultra will no doubt continue to acquire new products. It spent £45 million in the first half on four small acquisitions adding to its stable of high value added/high market share products.”

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