16th Nov 2023 09:54
(Alliance News) - Qinetiq Group PLC on Thursday backed annual guidance, though it said its first-half cash conversion rate was weaker than expected.
Shares in the company traded 3.7% lower at 337.60 pence each in London on Thursday morning, among the worst FTSE 250-listed performers.
The Farnborough, Hampshire-based defence technology company said revenue in the six months to September 30 totalled GBP883.1 million, up 31% from GBP673.4 million a year prior.
Qinetiq's pretax profit declined 35% to GBP85.8 million from GBP131.6 million. Operating costs were 40% higher at GBP767.2 million.
The firm lifted its interim dividend per share to 2.6p from 2.4p.
"I'm delighted with our strong first half results that have been achieved as a result of consistent operational performance from across the group and the continued dedication of our people to deliver high value services and products critical to national defence and security. We have delivered excellent organic growth and improved our margin performance. We have also won significant new business and major contract renewals, with a major highlight being the outstanding orders performance of Avantus with USD657 million of contract awards since the start of the financial year," Chief Executive Officer Steve Wadey said.
Qinetiq said it only achieved an underlying cash conversion rate of 50%, weakening from 98% a year prior. The ratio is calculated using the underlying earnings before interest, tax, depreciation and amortisation and underlying net cash flow from operations.
The firm added: "Whilst cash conversion in the first half was 50%, lower than the prior year due to short-term timing effects, full year cash conversion will be in-line with our previous guidance."
Qinetiq achieved an underlying Ebitda of GBP143.5 million, up 32% from GBP108.5 million a year earlier. Underlying net cash flow from operations weakened 33% to GBP71.7 million from GBP106.8 million, however.
For the full-year, it expects high single digit organic revenue growth.
Wadey added: "We enter the second half of the year with confidence and positive momentum. Our relevance in the market is evidenced by the increasing demand for our distinctive offerings and growing order pipeline. We remain focused on supporting our customers' mission and increasing returns for shareholders."
By Eric Cunha, Alliance News news editor
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