QinetiQ Group plc (QinetiQ or the Group) today issued a trading update covering its third quarter.
The Group has continued to perform well and we are maintaining our expectations for Group performance in the current FY19 financial year.
The EMEA Services division continued to deliver encouraging organic order and revenue growth compared to the prior year. Revenue under contract and operating profit were in line with our expectations.
Discussions with the UK Ministry of Defence (MOD) on the remaining scope of the Long Term Partnering Agreement (LTPA) for test and evaluation services continue to make good progress. The Group aims to secure pricing to 2028 and agree a similar level of investment and recovery mechanism to the December 2016 LTPA amendment.
The Global Products division delivered positive organic order and revenue growth compared to the prior year, with underlying operating profit improving during the third quarter. Revenue performance was particularly strong in QinetiQ North America.
The implementation of our strategy continues to gather momentum. Our increasing customer focus has resulted in further competitive contract wins and the successful delivery of key projects.
Our investment in UK Defence Test and Evaluation has supported the delivery of critical programmes:
- We are modernising MOD air ranges under the December 2016 LTPA amendment and this has enabled us to secure a contract to deliver Formidable Shield 2019. Building on the success of the 2017 event, QinetiQ will host this large, multi-national maritime exercise that will test the ability to respond to the latest and most advanced ballistic missile and sea skimming threats.
- We are playing a key role in supporting the UK MOD to assure the capability of the new F-35 aircraft. During the period, working with our partners, we successfully delivered the first live firings of F-35 weapons in the UK at the Aberporth air range.
We continue to build an international company through growth in our US and Australian home countries and wider international markets:
- As announced by the US Department of Defence in December 2018, QinetiQ North America was awarded a $90m framework contract to support the sustainment of the TALON family of robotic systems (https://dod.defense.gov/News/Contracts/Contract-View/Article/1716020/).
- Integration of Germany-based E.I.S. Aircraft Operations is progressing well with the combined business already working together on a number of customer projects.
We continue to advance our innovation strategy across our company:
- In October 2018, we signed a ten-year framework contract to be the Engineering Delivery Partner to the UK MOD’s procurement agency DE&S. We have secured more than £25m of tasking orders through this contract to date. This innovative approach to supply chain management ensures our largest UK customer receives the best possible engineering service from across the UK supplier base cost effectively.
- Following the launch of the European Space Agency’s BepiColombo mission in October 2018, QinetiQ’s T6 ion engines are now propelling the spacecraft on its seven-year voyage to Mercury.
QinetiQ will report its preliminary results for FY19 on Thursday 23 May 2019.
For further information please contact:
David Bishop, Group Director Investor Relations and Communications: +44 (0) 7920 108675
Investor Relations: Ian Brown, Group Head of Investor Relations: +44 (0) 7908 251123
Jon Hay-Campbell, Group Head of External Communications: +44 (0) 7500 856953