First Quarter Trading Update

RNS Number : 6621E

QinetiQ Group plc

20 July 2016

 

News release

20 July 2016

QinetiQ Group plc

First Quarter Trading Update

QinetiQ Group plc ("QinetiQ"), the science and engineering company that operates primarily in the defence, security and aerospace markets, today issues a trading update covering the period from 31 March 2016 to date.  This statement is issued ahead of QinetiQ's 2016 Annual General Meeting (AGM) to be held at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2HA at 11am today.

Trading

The expertise of QinetiQ's scientists and engineers is well matched to emerging themes in global markets and trading during the first quarter was in line with expectations.

EMEA Services

Revenue under contract in the EMEA Services division is similar to the position a year ago and is as anticipated at this stage in the financial year, despite some continued descoping and delay to orders. During the first quarter, the division won three orders for engineering support to the Wildcat, Apache and Tornado aircraft. These projects are to be delivered under the Strategic Enterprise agreement with the Ministry Of Defence (MOD) that is transforming the provision of aircraft test and evaluation.

The UK Government's Strategic Defence and Security Review has brought clarity to key defence programmes but will require further savings to be delivered from ongoing defence transformation.  This will provide future opportunities for EMEA Services to build on its strong record of delivering more for less, whilst recognising that in the short term there will continue to be uncertainty and the potential for interruptions to order flow. The division's performance as a whole is expected to remain steady this year.

Global Products

The Global Products division has shorter order cycles and a more lumpy revenue profile than EMEA Services.  FY17 revenue under contract continues to be slightly better than last year, but the performance of Global Products remains dependent on the timing and shipment of key orders.

Balance Sheet

The Group has a strong balance sheet that provides a solid foundation for investment in growth even at times of uncertainty.

The next scheduled triennial actuarial valuation of the Group's defined benefit pension scheme is due at 30 June 2017.  The recent fall in gilt yields, if sustained, would impact the measurement of scheme liabilities.

A £50m share repurchase was announced in November 2015 to be executed over 12 months, of which £37m was still to be completed as at 14 July 2016.  The Group expects to complete the buyback by the end of 2016 as planned.  

Outlook

The Group reaffirms its previous guidance for performance in the full year to 31 March 2017 as set out in its preliminary results announcement dated 26 May 2016. Overall, the Board's expectations for Group performance this financial year remain unchanged.

Notes to Editors:

About QinetiQ:

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.  See www.QinetiQ.com | www.QinetiQ-blogs.com p class="bg">For further information please contact:

Investor relations:	David Bishop, QinetiQ	[phone]
Media relations:	QinetiQ press office	[phone]
	Chris Barrie, Citigate Dewe Rogerson	[phone]

 

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