Ricardo skids on warning

RICARDO lost almost a third of its market value after the consulting engineer gave a shock warning that it faces its toughest year in recent memory.

Its shares plunged 110p to 277 1/2p following a surprise fall in annual pre-tax profits from £16.7m to £15.9m.

Many in the City had expected the group - which helps car manufacturers to design new technology - to post a small profit rise. The share fall cut Ricardo's value from £191m to £137m.

Chief executive Rodney Westhead said car makers are using fewer outside consultants as they struggle to cut costs.

Sales fell from £143.2m to £136.6m, but the dividend rises from 8.6p to 9p.

Chairman Sir Noel Davies steps down at the end of the year. He will be replaced by Marcus Beresford, the former chief executive of defence and aerospace group GKN.