QinetiQ full year profits fall in challenging markets

Defence engineering firm QinetiQ reported a fall in full year pre-tax profits of £90.2m compared with £105.4m a year earlier against a challenging markets backdrop.

Revenue fell to £755m from £763.8m after adjusting for foreign exchange movements and the divestment of the non-core Cyveillance business in December 2015 for net disposal proceeds of £22m.

Net cash rose to £274.5m from £195.5m and earnings per share were up to 18.6p from 16.6p.

Orders grew 8% to £659.8m due to the award of a £153m five-year renewal from the UK Ministry of Defence for aircraft engineering support, partially offset by some de-scoping and delays to orders in a “challenging market environment”.

The company said 74% of 2017 revenue was under contract. The company said 2017 expectations remained unchanged.
“Looking across our home and overseas markets we see a number of key themes. Governments are having to respond to increasing security threats with reducing budgets,” QinetiQ said.

“They need to deliver more with less. So not only are government customers seeking greater value for money from their suppliers, they are also looking for assistance in meeting their own 'efficiency' challenges.”

“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.”