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QinetiQ (LSE: QQ).

Head Office

Cody Technology Park

Ively Rd, Farnborough, United Kingdom

Tel : +44 1252 392000


The Company

QinetiQ was formed in July 2001, when the Ministry of Defence (MOD) split its Defence Evaluation and Research Agency (DERA) in two. The smaller portion of DERA, was rebranded Dstl (Defence Science & Technology Laboratory) and remains part of the MOD. The larger part of DERA, including most of the non-nuclear testing and evaluation establishments, was renamed QinetiQ and prepared for privatisation. QinetiQ became a public private partnership in 2002 with the purchase of a stake by US-based private equity company the Carlyle Group.

In 2003, QinetiQ signed a 25-year long term partnering agreement (LTPA) under which the company provides the UK MOD with innovative and realistic test and evaluation of military and civil platforms, systems, weapons and components on land, at sea and in the air. In February 2006, QinetiQ was successfully floated on the London Stock Exchange and the Carlyle Group sold its stake in the company.

Preliminary Results for year ended 31 March 2019

Our strategy is delivering - third year of growth Results for the year ended 31 March 2019
Statutory results                  Underlying (*) results
                      2019                     2018

Revenue               [pounds sterling]911.1m  [pounds sterling]833.0m
Operating profit      [pounds sterling]113.8m  [pounds sterling]141.0m
Profit after tax      [pounds sterling]113.9m  [pounds sterling]138.1m
Earnings per share                      20.1p                    24.4p
Full year dividend                       6.6p                     6.3p
per share
Total funded order
backlog (1)
Total orders in the
period (2)
Net cash inflow from  [pounds sterling]125.6m  [pounds sterling]132.4m
Net cash

Statutory results                  Underlying (*) results
                    2019                       2018

Revenue               [pounds sterling]911.1m    [pounds sterling]833.0m
Operating profit      [pounds sterling]123.9m    [pounds sterling]122.5m
Profit after tax      [pounds sterling]111.5m    [pounds sterling]109.0m
Earnings per share                      19.7p                      19.3p
Full year dividend                       6.6p                       6.3p
per share
Total funded order  [pounds sterling]3,133.6m  [pounds sterling]2,005.4m
backlog (1)
Total orders in       [pounds sterling]776.4m    [pounds sterling]587.2m
the period (2)
Net cash inflow       [pounds sterling]126.3m    [pounds sterling]126.5m
from operations
Net cash              [pounds sterling]188.5m    [pounds sterling]266.8m

(1) 2019 includes LTPA amendment signed 5 April 2019
(2) Includes share of Joint Ventures, excludes LTPA contract amendments

Delivered a third year of organic growth

* Orders up 32%, record [pounds sterling]3.1bn high-quality backlog (1)

* Revenue up 9%, 8% on an organic basis

* Underlying operating profit up 1% including ~[pounds sterling]7m non-recurring trading items (2018: ~[pounds sterling]9m), excluding them up 3% on an organic basis, offsetting UK single source profit headwind

* 102% underlying cash conversion pre-capex

* Underlying EPS up 2%; 5% increase in full year dividend

Driving growth through disciplined execution of strategy

* Secured [pounds sterling]1.3bn amendment to Long Term Partnering Agreement (LTPA) with UK MOD

* Won five competitive long-term programmes: UK, US & Canada

* Completed one acquisition and one strategic investment to grow training offering

* Grown international revenue from 21% to 30% in three years

* Engaged employees in driving and sharing benefits of growth

Priorities for FY20

* Operational performance; 74% revenue under contract (2018: 69%)

* Deliver first year of amended LTPA contract and develop growth opportunities

* Win further competitions and accelerate growth by pursuing campaigns globally

* Drive sustainable profitable growth through continued investment

* Maintaining expectations for Group performance in FY20

Steve Wadey, Group Chief Executive Officer said:

"This has been an excellent year with strong operational performance. By improving our customer focus and competitiveness, we have delivered a third successive year of revenue growth, increased our international revenue share from 21% to 30% over the last three years, offset the UK single source profit headwind and delivered organic profit growth.

Securing the LTPA amendment and winning five major competitive, long-term programmes demonstrates that our strategy is working, providing a platform for sustainable profitable growth."
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Title Annotation:Leading Companies in the Industry
Publication:United Kingdom Armaments
Geographic Code:4EUUK
Date:Jul 24, 2019
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