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QinetiQ, the defence, security and aerospace company, announces its preliminary results for the year ended 31 March which saw:

  • Return to organic growth in EMEA Services
  • Reduction in US conflict-related product sales and profits against strong prior year
  • New Proxy Board and Chairman to help reposition US Global Products
  • Sale of US Services after the year end creating a stronger, more focused Group
  • Net impact of US Services sale, capital return and debt pay-down expected to enhance EPS
  • Initiating previously announced £150m share buyback on completion of disposal
  • Balance sheet strengthened by high cash conversion and DB pension closure to future accrual
  • Maintaining expectations for overall Group performance in the current financial year
  • Continuing Group better positioned to deliver rising sustainable earnings
  • 21% increase in full year dividend reflecting confidence in Organic-Plus strategy
FY2014 2013
Business Performance
Revenue £1,191.4m £1,327.8m
Underlying operating profit £132.7m £168.7m
Underlying operating margin 11.1% 12.7%
Underlying profit before tax £119.4m £152.1m
Underlying net cash from operations (post capex) £136.5m £175.9m
Underlying cash conversion ratio 103% 104%
Net cash £170.5m £74.0m
Underlying earnings per share 16.0p 18.9p
Full year dividend per share 4.60p 3.80p
Statutory Reporting
Operating profit/(loss) £24.0m £(121.4)m
Profit/(loss) before tax £4.1m £(137.0)m
Loss after tax £(12.7)m £(133.2)m
Earnings per share - basic (1.9)p (20.5)p

Leo Quinn, QinetiQ Chief Executive Officer said:

“Four years ago, QinetiQ faced significant challenges. Our response has been to build a stronger Group from the ground up: leaner, debt-free and focused on those capabilities most needed by our customers following the recent reset in defence budgets. The sale of US Services is a key milestone in the Group’s transformation.

“From this foundation, our people are working hard across QinetiQ to deliver our growth strategy.

“In continuing uncertain markets, our EMEA Services division has achieved its first sales uplift in five years with all the core services businesses playing their part. A new Proxy Board and Chairman were appointed just after the year end to assist management in repositioning US Global Products and addressing its performance. Among our newer operations, OptaSense® is executing on landmark contracts in its three key vertical markets and received Queen’s Awards for Export and Innovation. Our developing cyber offerings and procurement advisory services have been established as strategic business units to realise their full potential.

“We now have a Group strongly differentiated by its expertise, innovation and financial discipline. Our portfolio combines high quality earnings with growth opportunities in new sectors and geographies, importantly underpinned by the right values and commercial culture.”

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