QinetiQ Group plc Third Quarter Trading Update (8892W)
February 15 2017 - 2:00AM
UK Regulatory
TIDMQQ.
RNS Number : 8892W
QinetiQ Group plc
15 February 2017
QinetiQ Group plc
Third Quarter Trading Update
QinetiQ Group plc ('QinetiQ' or 'the Group') today issues a
trading update for the third quarter during which it has made
encouraging progress in the implementation of its strategy to drive
future growth.
Strategy update
On 2 December 2016, QinetiQ was awarded a GBP1bn amendment to
its Long Term Partnering Agreement (LTPA) with the UK Ministry of
Defence (MOD) which commits approximately half of the core LTPA
revenues until 31 March 2028. The Group is already delivering
against its commitment to modernise UK air ranges and the Empire
Test Pilots' School at MOD Boscombe Down, including the purchase of
new aircraft to meet the future training needs of test pilots and
aircrew.
On 21 December 2016, the Group agreed and completed the
acquisition of Meggitt Target Systems. The business, now renamed
QinetiQ Target Systems, generates 90 per cent of its revenue from
outside the UK and forms part of QinetiQ's International business
unit. It will be reported in the Group's Global Products
division.
On 5 January 2017, the Dragonfire consortium - led by MBDA and
including QinetiQ as well as other industry partners - was awarded
a GBP30m programme by the UK MOD to deliver a Laser Directed Energy
Weapon (LDEW) Capability Demonstrator. QinetiQ's role is to provide
the high-powered laser technology for the programme and conduct
trials at various ranges over land and water.
Trading update
Underlying trading for the Group was as expected during the
third quarter.
In EMEA Services, revenue under contract for this financial year
is similar to the same time last year with resilient margins. As
stated previously, the division's performance as a whole is
expected to remain steady this year.
The Group's Global Products division has shorter order cycles
than EMEA Services. Revenue under contract is slightly ahead of
this time last year driven by improved order inflow in QinetiQ
North America, although the division's performance remains
dependent on the timing and shipment of key orders.
Balance sheet
The incremental capital expenditure associated with the
amendment to the LTPA contract is expected to be in the region of
GBP10m this year.
The Group is completing the previously announced GBP50m share
repurchase with GBP13m of the buyback remaining as at 10 Feb
2017.
Outlook
Overall, the Board's expectations for Group performance in the
current financial year remain unchanged from those set out in
QinetiQ's interim results announcement dated 17 November 2016.
QinetiQ will announce its preliminary annual results for the
year ending 31 March 2017 on 25 May 2017.
ENDS
Notes to Editors:
Download the QinetiQ investor relations app for iPad and iPhone
from the App Store.
Listed on the London Stock Exchange (LSE: QQ.L), QinetiQ is a
leading science and engineering company operating primarily in the
defence, security and aerospace markets. Our customers are
predominantly government organisations including defence
departments, as well as international customers in other targeted
sectors.
For more information see www.QinetiQ.com
Follow us on twitter @QinetiQ
For further information please contact:
Investor
relations: David Bishop, QinetiQ +44 (0) 7920 108675
Chris Barrie, Citigate
Media relations: Dewe Rogerson +44 (0) 7968 727289
QinetiQ press office +44 (0) 1252 393500
This information is provided by RNS
The company news service from the London Stock Exchange
END
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