Ultra has announced a series of contract wins in recent weeks, culminating in today’s significant $18.4m electronic warfare (EW) award for TCS in Canada. While the company is guiding for organic performance of -2% to +3% in 2016, prospects for global defence spending continue to improve. Increasingly, export customers appear to be upgrading capabilities, while traditional home markets in the UK and the US are now moving off recent lows. Ultra should benefit from this trend as well as its commercial exposures as new products and contracts start to contribute more meaningfully from next year. We continue to regard Ultra as robust, with our capped DCF and SOP both returning values closer to 1,900p per share.