REG - QinetiQ Group plc - QinetiQ Interim Results

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RNS Number : 3279H  QinetiQ Group plc  13 November 2025

Interim Results

13 November 2025

 

Taken action to drive short-term performance and long-term growth

Results for six months to 30 September 2025 ('H1 FY26')

 

Steve Wadey, Group Chief Executive Officer, said: "Operational performance in
the half has been in line with our expectations. Despite tough market
conditions, we delivered against our record order backlog and implemented our
restructuring activities, including disposal of the US Federal IT business.
Our mission critical capabilities remain highly relevant in a growing defence
market and together with our significant backlog and pipeline, we have
confidence to drive sustained long-term growth and compelling value creation
for our shareholders."

 

Financial highlights

                                Underlying 1  (#_ftn1) results            Statutory results
                                H1 FY26                 H1 FY25           H1 FY26  H1 FY25
 Revenue                        £900.4m                 £946.8m           £900.4m          £946.8m
 Operating profit 2  (#_ftn2)   £96.0m                  £106.6m           £64.3m           £94.3m
 Profit after tax               £76.8m                  £80.9m            £38.3m           £63.0m
 Earnings per share             14.2p                   14.2p             7.1p             11.1p
 Interim dividend per share     3.0p                    2.8p              3.0p             2.8p

 Order intake                   £2,416.5m 3  (#_ftn3)   £1,034.8m
 Funded order backlog           £4,345.7m               £2,936.1m
 Net cash flow from operations  £127.9m                 £130.9m           £100.4m          £118.1m
 Net debt                       £180.9m                 £190.9m

 

Group financial performance in line with our expectations for the half

 -  Organic 4  (#_ftn4) revenue down 3% due to US restructuring and tough
    near-term market conditions
 -  Underlying operating profit down 10% with margin ahead of guidance at 10.7%
 -  Underlying EPS flat at 14.2p reflecting the benefits of the accelerated share
    buyback
 -  Cash performance remains strong with good conversion at 85% and leverage at
    0.6x 5  (#_ftn5)
 -  Orders of £2.4bn, with a book-to-bill 6  (#_ftn6) of 0.9x impacted by
    near-term UK market conditions
 -  Progressive dividend growth of 7%, with interim dividend at 3.0p
 -  £101m total returns to shareholders (dividend and share buyback) in the first
    half

 

Highly relevant to our customers' mission in a growing defence market

 -  Differentiated company highly relevant to the increasing threat, with strong
    fundamental growth drivers structurally aligned to increasing defence spend
 -  US restructuring on track with business refocused and a book-to-bill of 1.5x
    to drive sustainable growth
 -  Secured £1.5bn LTPA extension to transform UK's Test & Evaluation
    (T&E) for future warfare
 -  Significant backlog of £4.8bn (funded and unfunded) and strong pipeline of
    £11bn gives good long-term visibility

 

FY26 guidance unchanged with continued discipline on capital deployment

 -  On-track to deliver c.3% organic revenue growth pre-FX and Federal IT disposal
 -  Revenue cover of 89% for the second half of FY26
 -  Margin at c.11% with c.90% cash conversion
 -  EPS growth at 15-20%

Dividend Declaration

The company announces an interim dividend of 3.0p (H1 FY25: 2.8p) per share
for the financial year ending 31 March 2026 on the Company's shares of 1
pence. The interim dividend will be paid on Friday 6 February to shareholders
on the register on Friday 9 January 2026. The interim dividend represents a 7%
increase on the prior half year dividend in line with our progressive dividend
policy. The full year proposed dividend will be announced with our full year
preliminary results in May 2026.

 

The dividend is conditional upon the Directors not having determined (at their
discretion) to cancel the dividend at any point prior to its payment.

 

This announcement contains regulated information as per Disclosure Guidance
and Transparency Rule (DTR) 6.3.

 

Interim results presentation:

We will be hosting an in-person results presentation at 09:30 GMT at Deutsche
Numis, 45 Gresham Street, London, EC2V 7BF. Registration to join in-person or
via the live webcast will be available via our website at
https://www.qinetiq.com/en/investors (https://www.qinetiq.com/en/investors) or
at https://brrmedia.news/QQ_FY26_Interim
(https://gbr01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fbrrmedia.news%2FQQ_FY26_Interim&data=05%7C02%7Cstephen.lamacraft%40qinetiq.com%7Cb9b3dc651f92421d5d1808de21e0bfe3%7C3b3b5e6662b24f048848ac445bc41444%7C0%7C0%7C638985446486162122%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=ysSyTlrq1T2j4Z%2B3vatiPobBSDeUfVJfJ5XiaC21vdc%3D&reserved=0)

To view the interim results document in full, please click on, or paste the
following link into your web browser
[http://www.rns-pdf.londonstockexchange.com/rns/3279H_1-2025-11-12.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3279H_1-2025-11-12.pdf) ]. The
interim results are also available in full on the website at
https://www.qinetiq.com/en-gb/investors/results-reports-and-presentations
(https://www.qinetiq.com/en-gb/investors/results-reports-and-presentations) .

 

The interim results for the year ending 31 March 2026 have been submitted in
full unedited text to the Financial Conduct Authority's National Storage
Mechanism and will be available shortly for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism

 

About QinetiQ:

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

 

For further information please contact:

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

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

 

LEI: 213800S8OBDOZMCMUW34

 

Basis of preparation:

Throughout this document, certain measures are used to describe the Group's
financial performance, which are not recognised under IFRS or other generally
accepted accounting principles (GAAP). The Group's Directors and management
assess financial performance based on underlying measures of performance,
which are adjusted to exclude certain 'specific adjusting items'. In the
judgment of the Directors, the use of alternative performance measures (APMs)
such as underlying operating profit and underlying earnings per share are more
representative of ongoing trading, facilitate meaningful year-to-year
comparison and, therefore, allow the reader to obtain a fuller understanding
of the financial information. The adjusted measures used by QinetiQ may differ
from adjusted measures used by other companies. Details of QinetiQ's APMs are
set out in the glossary to the document.

 

Year references (FY26, FY25, 2026, 2025) refer to the year ended 31 March

 

Disclaimer

This document contains certain forward-looking statements relating to the
business, strategy, financial performance and results of the Company and/or
the industry in which it operates. Actual results, levels of activity,
performance, achievements and events are most likely to vary materially from
those implied by the forward-looking statements. The forward-looking
statements concern future circumstances and results and other statements that
are not historical facts, sometimes identified by the words 'believes','
expects', 'predicts', 'intends', 'projects', 'plans', 'estimates', 'aims',
'foresees', 'anticipates', 'targets', 'goals', 'due', 'could', 'may',
'should', 'potential', 'likely' and similar expressions, although these words
are not the exclusive means of doing so. These forward-looking statements
include, without limitation, statements regarding the Company's future
financial position, income growth, impairment charges, business strategy,
projected levels of growth in the relevant markets, projected costs, estimates
of capital expenditures, and plans and objectives for future operations.
Forward-looking statements contained in this announcement regarding past
trends or activities should not be taken as a representation that such trends
or activities will continue in the future. Nothing in this document should be
regarded as a profit forecast.

The forward-looking statements, including assumptions, opinions and views of
the Company or cited from third party sources, contained in this announcement
are solely opinions and forecasts which are uncertain and subject to risks.
Although the Company believes that the expectations reflected in these
forward-looking statements are reasonable, it can give no assurance that these
expectations will prove to be correct. Actual results may differ materially
from those expressed or implied by these forward-looking statements. A number
of factors could cause actual events to differ significantly and these are set
out in the principal risks and uncertainties section of this document.

Most of these factors are difficult to predict accurately and are generally
beyond the control of the Company. Any forward-looking statements made by, or
on behalf of, the Company speak only as of the date they are made. Save as
required by applicable law, the Company will not publicly release the results
of any revisions to any forward-looking statements in this document that may
occur due to any change in the Directors' expectations or to reflect events or
circumstances after the date of this document. All subsequent written and
oral forward-looking statements attributable to either QinetiQ Group plc or to
persons acting on its behalf are expressly qualified in their entirety by the
cautionary statements referred to in this disclaimer and contained elsewhere
in this document.

 

QinetiQ Group plc and its directors accept no liability to third parties in
respect of this document save as would arise under English law. Accordingly,
any liability to a person who has demonstrated reliance on any untrue or
misleading statement or omission shall be determined in accordance with
Schedule 10A of the Financial Services and Markets Act 2000. It should be
noted that Schedule 10A and Section 463 of the Companies Act 2006 contain
limits on the liability of the directors of QinetiQ Group plc so that their
liability is solely to QinetiQ Group plc.

 

 

 1  (#_ftnref1) Definitions of the Group's 'Alternative Performance Measures'
can be found in the glossary.

 2  (#_ftnref2) Underlying operating profit refers to operating profit from
segments. See note 2 to the interim financial statements for details.

 3  (#_ftnref3) Including £1.5bn LTPA extension plus award of £166m relating
to current investments

 4  (#_ftnref4) Organic growth is the level of year-on-year growth, expressed
as a percentage, calculated at constant prior year foreign exchange rates,
adjusting for business acquisitions and disposals to reflect equivalent
composition of the Group

 5  (#_ftnref5) Net debt to underlying EBITDA for the last 12 months

 6  (#_ftnref6) B2B ratio is orders won divided by revenue recognised,
excluding LTPA orders and revenue of £132.1m (H1 FY25: £130.7m)

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