Pre-Close Trading Update

QinetiQ Group plc
22 March 2007


QinetiQ Group plc
22 March 2007

QinetiQ Group plc - Pre-Close Trading Update

QinetiQ Group plc, the international defence and security technology company,
today issues the following trading statement in respect of the year ending 31
March 2007. The Company's preliminary results will be announced on 31 May 2007.
The Board considers that QinetiQ has made good progress in its first full year
as a public company, consistent with its growth strategy, with new business
areas offsetting the expected declines in MOD Research revenue and LCD royalty
income. The Board confirms that the business has continued to trade in line with
expectations.

In the Defence & Technology (D&T) sector, overall revenues have been broadly
consistent with those in the prior year with growth in the Technology Supply
stream continuing to offset declining MOD Research revenue as this area is
increasingly opened to competition. The sector has experienced its traditionally
stronger second half and, in particular, a strong final quarter to the year. The
trend of incremental operating profit margin improvement has continued this
year.

D&T achieved a notable success in January, when the MOD announced that Metrix,
QinetiQ's joint venture with Land Securities Trillium, had been selected as the
preferred bidder for Package 1 and provisional preferred bidder for Package 2 of
the 25 year DTR (Defence Training Rationalisation) managed services contract.
Negotiations are ongoing with the MOD to refine the scope of the packages to
address customer affordability. The target remains to agree the final scope by
Autumn 2007, with financial close expected some 12 to 18 months thereafter. In
December 2006 QinetiQ reached financial close on the 20 year CATS (Combined
Aerial Target System) managed services contract, enhancing the service currently
provided under the LTPA contract. It is anticipated that this contract will
deliver approximately £100m of incremental revenues over its duration.

Within Security & Dual Use (S&DU), the overall revenue performance is expected
to be similar to the previous year, despite the expiry of LCD patents which
accounted for £13m of royalty income in 2005/06. Operating profit margins are
expected to be broadly similar to those achieved in the first half of the
current year. Commercial ventures have made steady progress, and a variety of
routes to accelerate value creation based around the substantial technology
portfolio continue to be explored.

QinetiQ North America (QNA) is delivering strong underlying organic growth,
particularly in the Technology business, which has seen continued high shipment
levels of the Talon robot. As previously indicated, the organic revenue growth
in other parts of QNA was held back by continued delays in gaining security
clearances for new staff in the IT Services business and the anticipated decline
in revenue from Westar's high margin Aerospace Filtration Systems business
(AFS). While these factors have contributed to revenue at the lower end of
expectations for the year, the change in revenue mix in favour of the higher
margin product business is expected to result in profit levels, in local
currency, in line with expectations. The weakening US dollar, which has declined
by some 7% year on year, has impacted on the translation of the trading results
of QNA operations, although maintaining the majority of net debt in US dollars
mitigates the economic impact of currency fluctuations on the Group.

QNA's organic growth has been complemented by three further acquisitions
announced during the year, namely Ocean Systems Engineering Corporation
(completed May 2006 for $53m), Analex Corporation (completed March 2007 for
$173m) and ITS Corporation (completion expected April 2007 for up to $90m). QNA
remains focused on its core growth opportunity areas and as a result realised
its investment in AFS which was sold in March 2007 for $39m.

QinetiQ's operating cash conversion has been lower than expected in the second
half of the year due to a repeat of the trend seen two years ago for certain
Ministry of Defence contracts to be awarded relatively late in the year, causing
some short term working capital absorption over the year end that is expected to
reverse early in the next financial year.

For further information please contact:

Graham Love, Chief Executive Officer:          [phone]
Doug Webb, Chief Financial Officer             [phone]

Nicky Louth-Davies, QinetiQ press office:      [phone]; [phone]
Chris Moseley, QinetiQ press office:           [phone]; [phone]
Adrian Colman, QinetiQ Investor Relations:     [phone]; [phone]


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