REG - QinetiQ Group plc - QinetiQ Preliminary Results

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RNS Number : 6870J  QinetiQ Group plc  22 May 2025

Preliminary Results

 

 

22 May 2025

 

FY25 Group Performance

Results for the year ended 31 March 2025

Long Term Partnering Agreement (LTPA) extension worth £1.54 billion announced
today

 

 

Steve Wadey, Group Chief Executive Officer, said: "Tougher near-term trading
conditions impacted performance in our UK Intelligence and US Sectors in the
fourth quarter. In response, we have taken decisive action and are focused on
reshaping the business for growth, with a clear restructuring plan to
strengthen and capture the increasing opportunities within our key markets.

 

"We finished the year with record order intake and continue to see strong
demand for our mission-critical capabilities. Today we announced a five-year
extension to the LTPA increasing total order backlog(3) to c.£5bn. The
fundamentals of our business are strong, our priority remains on delivering
value accretive organic growth. Our strong cashflow enables investment in our
people, technology and capability, and the delivery of attractive shareholder
returns."

 

Financial highlights

                                     Underlying* results                 Statutory results
                                     FY25              FY24              FY25              FY24
 Revenue                             £1,931.6m         £1,912.1m         £1,931.6m         £1,912.1m
 Operating profit/(loss)(1)          £185.4m           £215.2m           £(90.5)m          £192.5m
 Profit/(loss) after tax             £147.0m           £169.6m           £(185.7)m         £139.6m
 Earnings per share                  26.1p             29.4p             (33.0)p           24.2p
 Full year dividend per share        8.85p             8.25p             8.85p             8.25p

 Order intake                        £1,954.8m         £1,740.4m
 Funded order backlog                £2,845.1m         £2,873.0m

 Net cash inflow from operations     £316.2m           £320.2m           £286.7m           £294.1m
 Net debt                            £133.2m           £151.2m

 Group performance impacted by geopolitical uncertainty and delays to short
 cycle work
 -                 Revenue up 2% on an organic basis and 1% on a reported basis
 -                 Statutory operating loss includes specific adjusting items of £305.9m
                   primarily comprising impairment of goodwill, restructuring costs, and other
                   impacts predominately related to our legacy US operations and the non-cash
                   loss on the sale and lease back transaction
 -                 Cash performance remains strong with high conversion at 105%, reducing
                   leverage to 0.4x
 -                 Record order intake up 12% at £1.95bn, with a book-to-bill(2) of 1.2x and
                   order backlog of £2.8bn
 -                 Underlying EPS reduced 11.2% to 26.1p
 -                 Dividend growth of 7%, with proposed full year dividend of 6.05p, total
                   dividend for year 8.85p
 -                 £103m of our £150m existing share buyback programmes completed in year

 Focused on operational execution and return to sustainable growth
 -                 Increasing strategic focus to leverage UK base to better serve NATO and its
                   allies
 -                 Launched restructuring to drive improved effectiveness and cost efficiency,
                   including refining the US strategy to align with current national security and
                   defence priorities
 -                 Capital allocation focused on organic investment to drive growth and
                   shareholder returns

FY26 Outlook

 -    Revenue growth expected to be c.3% for FY26, with 75% revenue cover(3)
 -    Margin expected to be c.11% due to phasing of restructuring
 -    EPS growth expected to be 15-20%
 -    Additional £200m share buyback over 2 years announced in March, to commence

    in June

* Definitions of the Group’s ‘Alternative Performance Measures’ can be
found in the glossary

(1) Underlying operating profit refers to operating profit from segments. See
note 2 for details.

(2) B2B ratio is orders won divided by revenue recognised, excluding LTPA
revenue of £270m (FY24: £266m)

(3 )Funded and Unfunded

Preliminary results presentation:

Management will host a presentation at 09:30 hours BST on Thursday 22 May 2025
at Deutsche Numis, 45 Gresham Street, London, EC2V 7BF. The presentation will
also be shared as a live webcast. To register to join this event, please see
details on our website here: FY25 Preliminary Results presentation
(https://www.qinetiq.com/en/investors/results-reports-and-presentations/fy25-prelim-results)

You are warmly invited to join, either in person or virtually.

 

To view the preliminary results document in full, please click on, or paste
the following link into your web
browser http://www.rns-pdf.londonstockexchange.com/rns/6870J_1-2025-5-21.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/6870J_1-2025-5-21.pdf) . The
preliminary results are also available in full on the corporate website at
Investor Relations - QinetiQ

 

The preliminary results for the year ended 31 March 2025 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
(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.8,500 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:

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

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

 

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 (FY25, FY24, FY23, 2024, 2023) 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.

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