27 September 2013: Prior to entering its closed period, QinetiQ Group plc, the defence, security and aerospace company, reaffirms its previous guidance for Group performance in the full year to 31 March 2014.
EMEA Services continues to perform well, delivering a steady performance with good order intake. The division was recently selected to provide data security services to the UK Government’s smart meter programme under an £8m contract with CGI. Though still a relatively small proportion of total sales in EMEA Services, international order intake has also been encouraging so far this year. The division is now supporting the Libyan border security programme and is pursuing a strong pipeline of international opportunities which can leverage its core strengths.
The performance of US Services remains in line with expectations. Market conditions remain challenging under a reduced US Government budget and a slower contracting environment with frequent protests of contract awards. The impact of sequestration on US Government budgets for the fiscal year beginning on 1 October 2013 remains unclear and management is controlling its cost base tightly to maintain competitive rates. As previously announced, the Group is conducting a strategic review to determine the best way to maximise the value of this division, which possesses some strong capabilities and market positions.
The performance of Global Products, which has shorter order cycles and a more lumpy revenue profile than the services divisions, continues to be impacted by US budgetary pressures and the drawdown of overseas US military forces. Visibility of significant orders and their timing remains limited, with key programmes experiencing slippage in order placement, and the US Products business is holding back expenditure in all areas as a result. Talon orders worth $28m from Iraq and Pakistan, originally expected earlier in the year, have now been received and will largely be delivered in the second half of the year.
Cash generation remains strong, improving the Group’s net cash position.
The outlook for the full year to 31 March 2014 is unchanged from that set out in the Interim Management Statement (IMS) dated 25 July 2013. While the range of possible outcomes is wider than usual at this stage in the year, particularly in Global Products, and the full impact of sequestration remains unclear, the Board is maintaining its expectations for overall Group performance in the current year absent any material changes in customer requirements.
Notes to Editors:
QinetiQ interim results for the half year ending 30 September 2013 will be announced on 21 November 2013.
A FTSE250 company, QinetiQ uses its domain knowledge to provide technical support and know-how to customers in the global aerospace, defence and security markets. QinetiQ's unique position enables it to be a trusted partner to government organisations, predominantly in the UK and the US, including defence departments, intelligence services and security agencies.
For further information please contact:
Investor relations: David Bishop, QinetiQ +44 (0) 7920 108675
Media relations: QinetiQ press office +44 (0) 1252 393500
Liz Morley, Maitland