REG - QinetiQ Group plc - QinetiQ Group plc Fourth Quarter Trading Update

QinetiqAnnouncement

16/04/2024 07:00

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RNS Number : 7067K  QinetiQ Group plc  16 April 2024

News release

QinetiQ Group plc

Fourth Quarter Trading Update

16 April 2024 - QinetiQ Group plc ("QinetiQ" or the "Group") today issues a
trading update covering its fourth quarter to 31 March 2024.

On-track to deliver FY24 expectations

The Group has delivered good operational performance during the fourth
quarter, with continued strong organic revenue growth and stable operating
profit margin. As a result, we expect our results for the full year to 31
March 2024 to be in line with current market expectations 1 .

Order intake for the year has been excellent at more than £1.7bn achieving a
book-to-bill of 1.1x, demonstrating the continued high demand for our
distinctive offerings. Cash performance in the second half has been
particularly strong resulting in cash conversion of more than 100% for the
full year, supporting our disciplined capital allocation policy focused on
enhancing shareholder returns. The £100m share buyback programme announced in
January 2024 is progressing well with 6 million shares purchased to-date at a
cost of £22 million.

Throughout the fourth quarter we have seen a continuation of the trends
identified in our Interim Results and Q3 Trading Update across each of our
reporting segments - EMEA Services has performed particularly well with strong
revenue growth offsetting lower Global Solutions revenue growth.

Stronger performance in EMEA Services

EMEA Services has delivered excellent revenue growth in FY24, due to
successful programme execution of strong order intake and backlog from the
prior year, and our large long-term contracts of Engineering Delivery Partner
(EDP) and Weapons Sector Research Framework (WSRF) performing particularly
well.

Slower growth in Global Solutions

Global Solutions continued to be impacted by difficult market conditions in
the US. As a consequence, Avantus achieved modest revenue growth in the second
half compared to the first half. However, the business delivered double digit
operating profit margin and strong cash conversion of circa 100%. We are also
pleased that the business secured $977m of total contract awards during the
year, achieving a funded book-to-bill of 1.2x, with major programme wins
aligned to national defence and security priorities. This provides good
revenue visibility for FY25 and underpins our continued confidence in the
medium and long-term outlook for the business.

Expecting FY25 to be another strong year of growth

Looking forward, we expect FY25 to be another strong year at Group level and
we remain on-track to deliver in line with our longer-term guidance. The
trends that we have seen in FY24 are expected to continue into next year, with
stronger growth in EMEA Services and stable performance in Global Solutions in
FY25.

Steve Wadey, Group Chief Executive Officer said:

"During the fourth quarter we have continued to deliver against our strategy
and driven good revenue growth and stable operating profit margin.  We have
had a particularly strong period in EMEA Services, thanks to excellent
contract delivery across our programmes, and we expect further strong growth
in this segment. The performance of Global Solutions has been impacted by
ongoing market conditions in the US. However, the strong order intake in
Avantus provides confidence in our platform for future growth.

With a clear focus on disciplined execution of our strategy, high demand for
our distinctive offerings and the good progress we have made this year, we
have a robust plan to deliver long-term sustainable growth and compelling
value for our shareholders."

FY24 Preliminary Results

QinetiQ will publish its full Preliminary Results on Thursday 23 May 2024. We
will be hosting an in-person results presentation at 09:30 BST at the London
Stock Exchange, 10 Paternoster Square, London, EC4M 7LS. To register to join
in-person or via the live webcast:

https://www.qinetiq.com/en/investors/results-reports-and-presentations/fy24-prelim-results
(https://www.qinetiq.com/en/investors/results-reports-and-presentations/fy24-prelim-results)

About QinetiQ

QinetiQ is an integrated global defence and security company focused on
mission-led innovation. QinetiQ employs circa 8,500 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:

John Haworth, Group Director Investor Relations:
 
              +44 (0) 7920 545841

Lindsay Walls, Group Director Communications (Media
enquiries)                            +44 (0) 7793
427582

 

 1  Average consensus as at 15/04/24: £1,877m revenue, £211m operating
profit

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