REG - QinetiQ Group plc - First Quarter Trading Update

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RNS Number : 3646R  QinetiQ Group plc  17 July 2025

News release

QinetiQ Group plc

First Quarter Trading Update

17 July 2025 - QinetiQ Group plc ("QinetiQ" or the "Group") today issues a
trading update ahead of its Annual General Meeting (AGM) covering its first
quarter to 30 June 2025.

Steve Wadey, Group Chief Executive Officer, said:

"The ambition to accelerate warfighting readiness set out in the UK's
Strategic Defence Review and the recent NATO summit clearly underpin the
ongoing relevance of our mission essential capabilities, supporting our
confidence in the long-term growth prospects for the Group. We closed the
first quarter with a record order backlog of c.£5bn, providing a strong
foundation for long-term sustainable growth. We remain focused on operational
delivery and are on-track with our restructuring in the US."

 

Trading in line with expectations

The financial year has started as anticipated, having taken a prudent view on
the recovery of short cycle order flow and beginning the year with good
revenue cover of 75%. We are on-track with our cost efficiency programme, the
benefits of which will come through in the second half. Consistent with our
full-year expectations we anticipate c.46-48% of revenue in the first half at
c.10% margin and good cashflow. Our expectations for the full-year remain
unchanged with c.3% organic revenue growth, margin of c.11%, EPS growth in the
range of 15-20% and good cash conversion.

Market backdrop

The publication of the UK Strategic Defence Review and the UK Industrial
Strategy in June highlighted the shift in the UK's deterrence and defence as
well as the importance of investment in defence technology. We are well
positioned to support this shift with our focus on driving innovation and
productivity. Our capabilities remain highly relevant in keeping the UK's
competitive advantage, as evidenced through our long-term partnerships with
government, industry and international allies. The recent NATO summit also
provided a supportive backdrop with commitments to increase defence spending
and a focus on greater innovation and partnership.

Strategic progress and highlights

In our UK Defence Sector, the award of a five-year, £1.5bn extension to our
Long Term Partnering Agreement means we will provide mission critical Test
& Evaluation (T&E) and Training capabilities through to 2033, as the
UK MOD's strategic partner for T&E. We will also modernise strategic
T&E capabilities that are critical to major UK equipment platforms and
future upgrades. Securing this extension is a major milestone for the company
and provides a strong platform to put us at the centre of defence innovation
in the UK and enabling further international growth.

In our UK Intelligence Sector we have won a number of contracts, worth up to
£110m, to provide operational support and training to the UK Ministry of
Defence.

Revenue continues to be driven by good programme execution across our existing
contracts. Most notably in May, we successfully supported the NATO-led
Formidable Shield 25 exercise from the QinetiQ-operated MOD Hebrides range in
Scotland. This is Europe's largest Integrated Air and Missile Defence (IAMD)
exercise involving 11 Allied nations and around 7,000 military personnel. Our
team also provided training for the UK's Carrier Strike Group's deployment to
the Indo-Pacific region.

In our US business we are on track with the restructuring programme and
operationally are focused on the four areas of maritime systems, advanced
sensors, space and missile defence mission support and persistent surveillance
systems. Each area has enduring growth potential and combined constitutes the
majority of our Global Solutions revenue. Order flow to date in the US has
been good with $41m sensor integration for US Army, $49.9m IDIQ for sensor
data collection and management and annual framework funding received on the
Strategic Capabilities Office contract.

Capital Allocation

In line with our disciplined capital allocation policy, in June we completed
the £50m share buyback programme that was running through the year-end and
the £200m two-year share buyback programme we announced back in March 2025 is
underway.

The final FY25 dividend of 6.05p will be paid, subject to shareholder
approval, on 21 August 2025.

AGM and Board change

QinetiQ's 2025 AGM will be held at 11am today at Ashurst LLP, London Fruit
& Wool Exchange, 1 Duval Square, London E1 6PW.

As previously disclosed Non-executive director Ross McEwan will stand down
from the Board following today's AGM.

About QinetiQ

QinetiQ is an integrated global defence and security company focused on
mission-led innovation. QinetiQ employs c. 8,100 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.

 

For further information please contact:

Stephen Lamacraft, Group Interim Director Investor Relations:
                    +44 (0) 7471 885817

Stephanie Mann, Group Head of Media Relations
                                    +44 (0)
7770 720268

 

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