REG - QinetiQ Group plc - Fourth Quarter Trading Update

QinetiqAnnouncement

17/04/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230417:nRSQ3430Wa&default-theme=true

RNS Number : 3430W  QinetiQ Group plc  17 April 2023

News release

QinetiQ Group plc

Fourth Quarter Trading Update

17 April 2023 - QinetiQ Group plc ("QinetiQ" or "the Group") today issues a
trading update covering its fourth quarter to 31 March 2023.

Strong operational performance in fourth quarter - upgrading full year
guidance

The Group has delivered strong operational performance during the fourth
quarter, reflecting continued disciplined execution of our strategy. Today, we
are pleased to announce that we expect our results for FY23 to be ahead of our
previous guidance and the upper range of market consensus expectations.

Following an impressive fourth quarter, full year order intake is up by 40% at
a record-high of more than £1.7bn, demonstrating the continued high demand
for our distinctive offerings. Subject to audit, we expect to deliver
high-teens percentage total revenue growth at stable margins, with underlying
operating profit of at least £175m, including the benefit of the Avantus and
Air Affairs acquisitions. In addition to the robust orders, revenue and profit
performance, cash flow management continues to remain consistently strong and
we have successfully reduced leverage to below 1x, ahead of our original
guidance by 12 months.

Global Products performance has been good, in particular our US business has
delivered well, with high order intake of $280m and impressive revenue growth
of 25%, prior to the benefit of Avantus. We have won a number of key contracts
in the US that will support the delivery of our ambitious growth targets.
These include a $93m 4-year sole source Indefinite Delivery Indefinite
Quantity (IDIQ) Digital Night Vision Technology contract and c.$20m 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. In the first four months of our ownership,
whilst new business awards were lower than assumed, we achieved good
performance across our contracts delivering $100m revenue at our expected
margin of 10.8%. Integration is progressing ahead of plan and we are actively
pursuing revenue synergies by leveraging and cross selling our offerings to
our existing and new customer base. The combination of capabilities across
QinetiQ and Avantus has created a disruptive defence and intelligence business
in the US and we remain on-track to deliver on the strategic and financial
returns outlined previously.

In EMEA Services, we have achieved a number of strategic wins with continued
good growth in the UK and Australia. In the UK we have won a £259m 10-year
renewal of the Maritime Strategic Capability Agreement (MSCA) with the
Submarine Delivery Agency to deliver critical sovereign capabilities in the
assurance of the Royal Navy's surface and subsurface fleet, including the UK's
continuous at sea deterrent.  In addition, we won an £80m 10-year mission
data contract, known as SOCIETAS, with the UK MOD to provide expertise,
training and support to accelerate and transform mission data production
enabling the military to be better protected in a rapidly changing threat
landscape and enhance the performance of advanced military systems. In
Australia we have won a A$13m 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,
demonstrating our global leverage of advanced technology from the UK into
Australia. Integration of Air Affairs is progressing to plan and performance
remains in-line with expectations.

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."

Inside information

This announcement contains inside information and the person responsible for
making this announcement is James Field, Company Secretary and Group General
Counsel.

Preliminary results

We will announce our full year preliminary results on 25 May 2023. We will be
hosting an in-person results presentation with live webcast, at 09:30 hours
BST on 25 May 2023 at Numis' auditorium, 45 Gresham Street, London EC2V 7BF.
To register to join this event, please see details on our website here:

https://www.qinetiq.com/en/investors/results-reports-and-presentations/full-year-results-webcast-2023
(https://www.qinetiq.com/en/investors/results-reports-and-presentations/full-year-results-webcast-2023)

About QinetiQ

QinetiQ (QQ.L) is a leading science and engineering company operating
primarily in the defence and security markets. We work in partnership with our
customers to solve real world problems through innovative solutions delivering
operational and competitive advantage. 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

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTBCGDSDDBDGXL