Qinetiq on track to meet full year expectations

FTSE 250 defence and aerospace technology company Qinetiq is on track to deliver on its expectations for the current financial year.

Qinetiq, which is due to release its preliminary results for the year ending 31 March on 26 May, said its EMEA Services division has continued to perform as set out in the third quarter trading update.

The group’s Australian business was awarded a five-year follow-on contract with rolling extensions for up to 15 years, to provide aircraft structural integrity services for the Australian Defence Force's Directorate General Technical Airworthiness.

Qinetiq said trading in the Global Products arm has been as expected in the period, with the US products business winning small robot and survivability orders for both US and overseas customers.

The company noted that earlier in the month, the UK Secretary of State for Defence announced that next year's baseline profit rate for single source defence contracts will be 8.95% compared with 10.6% this year.

The new rate will apply to new or renewed qualifying contracts signed from 1 April 2016 to 31 March 2017 and acts as the starting point for agreeing the profit rate for individual contracts.