Shares in UK defence company Ultra Electronics slumped on Friday following a report that the UK defence review has been delayed.
According to the Financial Times, ministers are planning to break up a UK national security and defence review while the government considers how it will fill a £20bn funding "black hole" at the Ministry of Defence.

The FT said the government is now looking at publishing the remaining 11 security elements of the review as soon as possible, with decisions on the future of the armed forces pushed back until later in the year.

The proposal to split the review was said to have been discussed at a meeting attended by PM Theresa and a group of other senior ministers just before Christmas.

Mike van Dulken, head of research at Accendo Markets, said: "The shares had been topping out since Wednesday, following a 25% 6-week rebound. The real driver for this morning's down move may in fact be last night's news of a delay to the UK defence review while solutions are sought for a £20bn funding black hole at the MoD, and amid political backlash since the internal appointment of chief tory whip Gavin Williamson as defence secretary."

He added: "Technology is key in light of increased cyberwarfare and online threats and will only add to sector players' uncertainty about future spending. Note peer shares weak, down up to 1.5%, but ULA is underperforming markedly. Perhaps due to its links with both defence and aviation, the latter now extremely technology reliant."

Also weighing on the shares was a note by Berenberg, in which the bank reiterated its 'sell' rating on the stock, saying the recent 20% rally provides an opportunity to short the stock into the post-close statement on 11 January.

"Following the November 2017 profit warning, CEO departure and Sparton acquisition delay, the shares de-rated 38% to an eight-year low. The stock has now rallied 20%, creating an opportunity to short into the forthcoming trading update.

"We believe cautious 2018 guidance will be set. In addition, material risks regarding the Sparton transaction and Oman arbitration remain."

At 0900 GMT, Ultra shares were down 6.8% to 1,295.50, Cobham shares were off 1.7% to 124.70p, and Qinetiq was down 1.3% at 231.90p.

Related share prices
Cobham (COB) share price
Ultra Electronics Holdings (ULE) share price
QinetiQ Group (QQ.) share price