QinetiQ on track after 'good' second quarter

15th Oct 2024 07:34

(Sharecast News) - QinetiQ Group said in a trading update on Tuesday that it remained on track to meet its full-year expectations after its second quarter.

The FTSE 250 defence technology firm said it expected to deliver high single-digit organic revenue growth and maintain stable margins, with cash conversion at around 80%.

It said its £100m share buyback programme was also progressing as planned, with £62m in shares already repurchased by the end of the quarter.

Operationally, QinetiQ reported solid performance across its key divisions.

In EMEA services, the company noted strong programme execution in both the UK and Australia.

Its Global Solutions unit, including the legacy Avantus business, performed in line with expectations, particularly in major contracts with the US Space Development Agency and the Office of the Secretary of Defense's Strategic Capabilities Office.

The group's order intake continued to drive its medium and long-term growth outlook, supported by increased defence spending in its core markets.

QinetiQ noted that it secured several strategic contracts during the quarter, including a €284m aerial training services agreement with the German Armed Forces, marking the largest contract ever awarded to its Global Threat Representation business.

The company also entered the US market as a prime contractor for aerial target systems with a contract from the US Army.

Other notable wins included contracts with the US Navy for aircraft carrier technology and a three-year, £150m agreement with the British Army to advance tactical military communications.

Additionally, QinetiQ announced the sale and leaseback of its Farnborough site, which was expected to generate £112m in cash in the second half of the year.

"We have delivered a good operational and financial performance in the quarter, and our services and products continue to be of high relevance and significant value to our customers in a heightened threat environment," said group chief executive officer Steve Wadey.

"Against a backdrop of political transition in our core markets, I am pleased that order intake momentum has been maintained, which underpins our long-term sustainable growth."

QinetiQ said it would report its full interim results on 14 November.

Reporting by Josh White for Sharecast.com.