QinetiQ welcomes the publication of the NAO report on the privatisation of QinetiQ particularly its articulation of the extraordinary success achieved in transforming a declining and costly government agency into a thriving commercial company. The NAO’s figures show the taxpayer has benefited by more than £776 million from this process to which must be added the avoidance of a pension liability valued at £245 million at the time of the IPO.
At the same time the Government has shed its responsibility for ongoing support of QinetiQ and created the incentive for QinetiQ staff and managers to undertake the transformation of the company from an organisation wholly dependent on the Ministry of Defence to a successful, international technology company.
At the time when QinetiQ was being auctioned in 2002 its future was far from assured. Its core research business – over which it had enjoyed a near monopoly – was being opened up to full competition, and it lacked wider market access for its technology. The NAO records that between 2003 and 2006 QinetiQ's management and staff overcame these challenges and drove a 36 per cent increase in revenues and 261 per cent increase in operating profits.
This outstanding performance of the company, outstripping anything that was expected at that time, has driven the excellent returns for all shareholders.
QinetiQ (pronounced as in 'kinetic energy') is a leading international defence and security technology business that was formed in July 2001 from the UK Government's Defence Evaluation & Research Agency (DERA). QinetiQ has approximately 13,500 employees, who deliver technology-based services and exploit QinetiQ's strengths in technology research by selling systems solutions, products and licences to government and commercial customers in a spectrum of defence, security and related commercial markets.
In February 2006, QinetiQ Group plc was listed on the London Stock Exchange (main market) and joined the FTSE250 in June 2006. In the year to 31 March 2007, QinetiQ delivered a 17.4 per cent rise in underlying operating profit before tax to £106.0m on turnover which rose by 9.3 per cent to £1,149.5m.