Strong demand boosts profits at QinetiQ

Defence technology specialist QinetiQ Group lifted its full-year guidance on Thursday after a spike in first-half revenues and profits.

Underlying revenues for the six months to 30 September jumped 12% to £673.4m, while operating profits rose to £74.1m from £53.4m a year previously. Orders jumped 18% to £798.8m.

On a statutory basis, operating profits came in at £100.1m, against £41m a year earlier, boosted by a foreign exchange gain on the acquisition, announced in August, of US software firm Avantus Federal.

Steve Wadey, chief executive, said: "World events continue to reinforce the vital importance of a technology-advanced defence industry to society and the needs of our customers for differentiated solutions.

"Our first half results demonstrate the strong demand we continue to see from our customers for our distinctive offerings.

"Our home countries of UK, US and Australia have all achieved significant organic growth and the US has performed particularly well, delivering improved and consistent performance."

Looking to the second half, QinetiQ said it was increasing revenue guidance and remained on track to meet profit expectations.

It continued: "Given our strong growth in the first half, we will deliver high single-digit percentage organic revenue growth, with underlying profit margin at the lower end of our 11% to 12% short-term expected range, due to increase investment in our people and capabilities to enable growth."

Capital expenditure is expected to come in towards the middle of its forecast £90m to £120m range.