Strong fourth quarter puts QinetiQ up on previous expectations
Malvern-based security and defence contractor QinetiQ has announced it expects its results for Financial Year 23 to be ahead of both previous guidance and market expectations following strong operational performance in Quarter Four.
Following this latest period, the firm’s full year order intake is up by 40 per cent to a record high of more than £1.7 billion.
Subject to audit, QinetiQ expects to deliver high-teens percentage total revenue growth at stable margins, with underlying operating profit of at least £175 million, including the benefit of the Avantus and Air Affairs acquisitions.
The group also announced consistently strong cashflow management and an ahead of schedule leverage reduction to below 1x.
In the United States, QinetiQ has order intake of $280 million and revenue growth of 25 per cent before the benefit of Avantus. The firm has also won a number of contracts in the US which will help it to deliver its growth targets, including a $93 million 4-year sole source Indefinite Delivery Indefinite Quantity (IDIQ) Digital Night Vision Technology contract and around $20 million of orders to support the ongoing US Army Robotic Combat Vehicle Light (RCV-L) experimentation.
Since completion of the acquisition of Avantus at the end of November 2022, the business has continued to perform well, including two successful re-competes and selection for a new $80m multi-year contract with a national intelligence customer.
Read more - QinetiQ wins £80m contract win with UK MOD
In the EMEA region, QinetiQ has achieved a number of strategic wins with continued good growth in the UK and Australia. The company has won a £259 million 10-year renewal of the Maritime Strategic Capability Agreement with the Submarine Delivery Agency, and an £80 million 10-year mission data contract, known as SOCIETAS, with the UK MOD.
In Australia, the firm has won a A$13 million 3-year contract to develop and manufacture a high energy defensive laser weapon system prototype, to establish a sovereign in-country High Energy Laser manufacturing capability for Australia.
Steve Wadey, Group Chief Executive Officer said: "Our better than expected Group performance and strong order book is testament to our employees and their clear focus on the disciplined execution of our strategy.
“The integrations of Avantus and Air Affairs, two strategically significant acquisitions in the US and Australia, are progressing well and create a strong global platform. These achievements, coupled with effective use of our balance sheet, provide positive momentum for us to deliver sustainable performance in the years ahead and we remain on-track to reach our strategic growth ambition.
"Our distinctive offerings remain in high demand, demonstrating we are well placed to respond to our customers' long-term needs driven by world events and the importance of a technologically advanced defence industry to the national security interests of our 3 home countries."
Read more - Qinetiq reports profits boost and strong demand
