REG - QinetiQ Group plc - First Quarter Trading Update

QinetiqAnnouncement

20/07/2023 07:00

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RNS Number : 5838G  QinetiQ Group plc  20 July 2023

News release

QinetiQ Group plc

First Quarter Trading Update

20 July 2023 - QinetiQ Group plc ("QinetiQ" or "the Group") today issues a
trading update covering its first quarter of trading.

On-track to deliver year end expectations - good first quarter performance

Building on the strong performance of FY23, we have made a positive start to
FY24. Order intake has continued to remain strong and we are pleased with our
revenue, profit and cash performance. Our visibility on revenue under contract
for FY24 has increased to £1.3bn, up from £1.1bn at April 2023.
Consequently, we remain confident of delivering in-line with our expectations.

We have seen a strong start to the year in Global Products, which we are
renaming Global Solutions, based on the increasing high value service content
versus products. Our performance momentum in the US continues, integration
activities remain ahead of plan and we are making good progress on new
business opportunities. EMEA Services continues to perform well with good
underlying performance across all metrics.

Steve Wadey, Group Chief Executive Officer said:

"The global security situation continues to highlight the importance of
defence and security and we remain focused on our three home countries who
have a shared defence and security mission under the trilateral partnership
known as AUKUS.  We are aligned to our customers' priorities to modernise
their capabilities in the current threat environment, most recently evidenced
by the UK's Defence Command Paper which reaffirmed the importance of Science
and Technology and identified significant investment in technologies to
deliver mission critical advantage.

"We continue to see a significant opportunity from the widening threat
spectrum, with our six distinctive offerings well aligned to areas of the
defence and security budgets where greatest priority and funding is being
directed, such as experimentation and technology, cyber and information
advantage, and training and mission rehearsal."

Continued progress towards delivering our strategic ambition

QinetiQ is a purpose-driven company at the forefront of national defence and
security - we are protecting lives by serving the national security interests
of our customers. As outlined in our full year results, we have raised the
strategic ambition for the company, targeting high single digit organic
revenue growth, supplemented by further strategic acquisitions, to build the
company to £3bn revenue by FY27. This will result in revenue and profit
approximately doubling over the next four years. In the first quarter, we are
pleased to achieve a number of successes that demonstrate delivery towards
this increased strategic ambition:

 ●    $40m research and engineering contract award in the US (former Avantus
      business) - We have won $40m of contract awards from the Prototypes and
      Experiments Director for the Under Secretary of Defense for Research and
      Engineering, to accelerate the delivery of advanced technologies to the Joint
      Warfighter. Our work includes prototyping, demonstration and experimentation
      activities, enabling future experimentation with the UK, Australia and other
      allies. We continue to successfully build the pipeline and orderbook to
      support delivery of our ambitious growth plan in the US.
 ●    $86m backlog on Joint Adversarial Training and Testing Services (JATTS)
      contract in Australia (former Air Affairs) - Under the JATTS contract, we are
      delivering training support to the Australian Defence Force with 'enemy' force
      aircraft and aerial tow targets. We are supporting a range of Royal Australian
      Air Force platforms including F-35, Super Hornet and Wedgetail airborne early
      warning aircraft as well as Royal Australian Navy's frigates and guided
      missile destroyer capabilities, and unmanned target services against the
      Australian Army's ground based air defence capabilities. This contract
      supports our growth strategy to more than double the size of the Australian
      business over the next 4 years.
 ●    Formidable Shield 2023 in the UK - During May 2023, QinetiQ successfully
      demonstrated its central role in global defence and security, through one of
      the world's largest tests of naval and missile defences.  The exercise
      harnessed the power of some of the most advanced technologies in the world in
      order to enable a joint NATO force to operate seamlessly together and to
      better understand and defeat complex evolving threats.  Hosted at MOD
      Hebrides, operated by QinetiQ on behalf of the Ministry of Defence, the
      exercise saw more than 20 ships, 35 aircraft, and nearly 4,000 Allied military
      personnel from 13 NATO nations come together to test missiles, systems,
      sensors and software against ballistic, subsonic and supersonic targets in a
      realistic, live-fire mission rehearsal event.
 ●    £38m Defence Digital and £19m Intelligence orders in the UK - Our UK
      Intelligence Sector continues its strong growth across new business and
      renewals. We have won a £38m contract extension with Defence Digital and
      £19m of data intelligence orders in Naimuri from its security customers. We
      have also received our largest order of advanced Q20HD high dynamics GPS
      receiver devices (over 3,000 units), demonstrating the ongoing demand for
      current and future generations of our precision guidance capabilities, used in
      demanding high dynamic platforms, weapons and test and evaluation
      applications.
 ●    LTPA variation of price contract uplift in the UK - To reflect inflationary
      effects, we have been awarded a £56m uplift to the LTPA contract. This
      increase represents current elevated inflation impact through to the end of
      the current contract in 2028.

 

AGM

QinetiQ's 2023 Annual General Meeting (AGM) will be held at 11am today at
Ashurst LLP, London Fruit & Wool Exchange, 1 Duval Square, London E1 6PW.

Investor Seminar

QinetiQ will be hosting an in-person capital markets Investor Seminar on
25(th) October 2023 in New York. We welcome you to attend and will release
further details in due course.

About QinetiQ

QinetiQ is an integrated global defence and security company focused on
mission-led innovation. QinetiQ employs more than 8,000 highly-skilled people,
committed to creating new ways of protecting what matters most; testing
technologies, systems, and processes to make sure they meet operational needs;
and enabling customers to deploy new and enhanced capabilities with the
assurance they will deliver the performance required. Visit our website
www.QinetiQ.com (http://www.QinetiQ.com) . Follow us on LinkedIn and Twitter
@QinetiQ.  Visit our blog www.QinetiQ-blogs.com
(http://www.QinetiQ-blogs.com) .

For further information please contact:

 John Haworth, Group Director Investor Relations:                             +44 (0) 7920 545841
 Lindsay Walls, Group Director Communications (Media enquiries):              +44 (0) 7793 427582

 

 
 

 

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