1st Apr 2020 08:35
(Alliance News) - Engineering company QinetiQ Group PLC on Wednesday said it will be "prudent" to postpone its final dividend but added that its annual performance was in line with expectations.
The company, which ended its financial year on Tuesday, said it will decide on whether to propose a full-year dividend later in 2020.
QinetiQ said: "The Covid-19 crisis is affecting all our key markets and we continue to monitor closely the impact on our business. We have seen some level of disruption to customer trials and product shipments due to changing customer priorities and travel restrictions. Whilst we have a strong order book, underpinned by significant long-term contracts we are taking a measured approach to protecting skills and critical capabilities, delivering flexibly for our customers and ensuring resilience within the business.
"The work QinetiQ does is vital to maintaining the capabilities of defence, security and critical national infrastructure, including the emergency services. Whilst our customers are facing significant challenges due to the threat of Covid-19, we are working closely with them to ensure we can provide support to the delivery of their priorities at this critical time."
The company added its chief executive officer and chief financial officer have agreed to cut their salary by about a third, with the rest of the board agreeing to a 25% fee reduction.
"We are also taking a prudent approach to controlling cash outflows, including reducing operating expenditure and deferring discretionary capital expenditure," QinetiQ said.
It added: "Given the uncertainty surrounding the economic outlook, we believe it is appropriate to remain prudent. In addition to the pro-active steps we are taking around cost and investment, the board has decided to postpone the decision on the proposal of a final full year dividend until later in the year when there is greater clarity."
The company said it ended the financial year with net cash of about GBP60 million available, and it has an undrawn committed revolving credit facility of GBP275 million.
QinetiQ added that it entered the new financial year with an order backlog of around GBP3 billion.
CEO Steve Wadey said: "The business remains robust with good liquidity, a strong balance sheet and significant order backlog. However we believe, based on recent events, it prudent to implement a number of short-term actions to control cash outflow."
Shares in the company were 4.9% lower at 306.36 pence each in London on Wednesday morning.
By Eric Cunha; [email protected]
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