Interim Management Statement

QinetiQ Group plc 24 January 2008 QinetiQ Group plc 24 January 2008 Interim Management Statement QinetiQ Group plc ('QinetiQ'), the international defence and security technology company, today issues the following Interim Management Statement, covering the period from 1 October 2007 to 23 January 2008. Group trading Trading in the third quarter has remained robust and the results for the third quarter and trading outlook for the remainder of the year to 31 March 2008 remain in line with the Board's expectations. QinetiQ North America (QNA) QNA has seen continued strong order levels across its business. In the Technology Solutions Group Talon order visibility and shipment levels remain strong and orders are expected for other products such as LAST Armor which is being incorporated into Force Protection Inc's Mine Resistant Ambush Protected (MRAP) vehicle programme for the US DoD. The Systems Engineering & Technical Assistance division has seen strong order flow including a $62m, 3 year task order to train Iraq's army helicopter pilots. The Mission Solution Group has been awarded a new five year contract expected to be worth in excess of $100m to provide environmental test and integration services at the Goddard Space Flight Center for NASA and IT Services continues to see firm order levels despite budget pressures being experienced by a number of its federal customers. In January 2008 the Mission Solutions Group announced the acquisition for up to $6.0m of the Virginia based network security specialist, Pinnacle CSI which specialises in services to enhance the protection of critical interagency networks within the Intelligence community. The Group continues to pursue a healthy pipeline of acquisition opportunities to supplement the strong organic growth in the QNA sector. Europe, Middle East and Australasia (EMEA) The previously announced EMEA reorganisation and portfolio review remains on track and the new structure will be in place from 1 April 2008. Consultations have commenced with affected staff and are due to complete in April 2008. Order flow in the EMEA business is in line with expectations and notable amongst the wins is a £33m order as part of the successful consortium on the UK Government's e-Borders programme. In October EMEA announced the acquisition of Boldon James for initial cash consideration of £15.7m. Boldon James is a UK based provider of software solutions for high end secure messaging primarily for military, government and security customers worldwide. This acquisition enhances QinetiQ's portfolio of security based software products and broadens its customer base. As part of the programme to build out established UK service offerings into other defence markets globally, the Group has announced in January 2008 its first acquisitions in Australia; Ball Solutions Group (consideration £6m); Novare Services (consideration £4m); and Aerostructures (consideration £5m). These three acquisitions provide the Group with a skilled workforce of over 275 employees with combined historical turnover in excess of £20m per annum. This creates an initial platform to provide consulting services, principally to the Australian Department of Defence, and growth opportunities through the integration of these businesses and leveraging appropriate offerings from the UK and North American businesses. The transactions are expected to complete in February 2008. Ventures The Ventures businesses continue to make satisfactory operational progress. The Tarsier business won an order from Doha International Airport for a three radar head installation and has also successfully demonstrated a prototype of the integrated camera system enhancement at London Heathrow. Financial position The balance sheet remains strong and there have been no significant changes in the financial position of the Group since that reported as at 30 September 2007, other than in respect of the acquisitions noted above which were funded through an increase in bank borrowings. Outlook The Board remains confident about the outlook for the Group. Notes to Editors About QinetiQ: QinetiQ (pronounced ki net ik as in 'kinetic energy') is a leading international defence and security technology business that was formed in July 2001 from the UK Government's Defence Evaluation & Research Agency (DERA). QinetiQ has over 13,500 employees, who deliver technology-based services and exploit QinetiQ's strengths in technology research by selling systems solutions, products and licences to government and commercial customers in a spectrum of defence, security and related commercial markets. In February 2006, QinetiQ Group plc was listed on the London Stock Exchange (main market) and joined the FTSE250 in June 2006. In the year to 31 March 2007, QinetiQ delivered a 17.4 per cent rise in underlying operating profit before tax to £106.0m on turnover which rose by 9.3 per cent to £1,149.5m. For further information see www.QinetiQ.com Contacts: QinetiQ Investor Relations: Adrian Colman +44 (0)7740 432699 Disclaimer All statements other than statements of historical fact included in this document, including, without limitation, those regarding the financial condition, results, operations and businesses of QinetiQ and its strategy, plans and objectives and the markets and economies in which it operates, are forward- looking statements. Such forward-looking statements, which reflect management's assumptions made on the basis of information available to it at this time, involve known and unknown risks, uncertainties and other important factors which could cause the actual results, performance or achievements of QinetiQ or the markets and economies in which QinetiQ operates to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this document should be regarded as a profit forecast. This information is provided by RNS The company news service from the London Stock Exchange
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