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Preliminary Results for the year ended 31 March 2013


Committed to delivering value

2013 2012 (restated^)
Business Performance
Revenue £1,327.8m £1,469.6m
Organic change at constant currency (10)%
Underlying operating profit* £168.7m £159.6m
Underlying operating margin* 12.7% 10.9%
Underlying profit before tax* £152.1m £110.2m
Underlying net cash from operations* (post capex) £175.9m £235.4m
Underlying cash conversion ratio* 104% 148%
Net cash / (debt) £74.0m £(122.2)m
Underlying earnings per share* 18.9p 13.6p
Dividend per share 3.80p 2.90p
Statutory Reporting
Operating (loss) / profit £(121.4)m £361.3m
(Loss) / profit before tax £(137.0)m £316.3m
Earnings per share - basic (20.5)p 37.9p


Robust overall Group performance in tough markets during 2013:

  • 6% increase in underlying operating profit* driven by excellent performance in UK Services
  • Net cash position achieved through strong cash generation
  • 31% increase in full year dividend, reflecting in-year growth in underlying earnings per share* and the Group’s commitment to delivering value

Good progress implementing Organic-Plus programme as route to delivering value:

  • Agreed five-year, £998m re-pricing of Long Term Partnering Agreement (LTPA) with MOD, underpinning core UK Services business
  • Non-cash £256m goodwill impairment in US Services; initiating strategic review
  • Expanding Global Products portfolio to increase focus on non-conflict markets
  • Positioning for sustainable earnings growth over the medium term
  • Commenting on the results, Leo Quinn, QinetiQ Chief Executive Officer said:
“Overall, the Group has delivered a robust performance in tough markets. UK Services was the stand-out performer, demonstrating its unique strengths as well as the benefits of our self-help programme, with Global Products continuing to diversify into non-conflict technologies such as OptaSense®, space technology and power line sensors. The decline in performance of US Services reflected the continuing very challenging market conditions and we have decided to initiate a strategic review of this division to determine the best way to maximise its value. “A key step in transforming QinetiQ has been the achievement of net cash. Having paid down over half a billion pounds of debt in three years, we have both financial resilience and capacity to invest. We are now committed to delivering value by building a Group capable of both growth and high quality returns.

“UK Services is expected to remain steady this year but the heightened uncertainty around US federal services spending is causing low levels of visibility in US Services. As anticipated, budgetary pressures and the drawdown effect seen towards the end of last year are continuing to affect the timing and quantity of sales in Global Products. While the range of possible outcomes is wider than usual at this stage in the year 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.”

Other information

There will be a presentation of the preliminary results to analysts at 0900 hours UK time on 23 May 2013 at the London Stock Exchange, 10 Paternoster Square, EC4M 7LS. Registration for the webcast is available at: www.QinetiQ.com/investors where the presentation will also be available. An audiocast of the event will be available on the following numbers (confirmation: 10834833):

UK Freephone: 0800 634 5205
International / London local: +44 (0)208 817 9301

For further information please contact:

Media relations:  QinetiQ press office +44 (0) 1252 393500
  Liz Morley, Maitland +44 (0) 7798 683108
Investor relations: David Bishop, QinetiQ +44 (0) 7920 108675

*Definitions of underlying measures of performance can be found in the glossary.
^ IAS 19 (revised) ‘Employee benefits’ has been adopted for 2013 and the 2012 comparatives have been restated accordingly. Refer to note 1.